Winter tended to linger this year in our part of the country bringing a later than usual spring crop of new listings. As homes became available, pent up buyers were more than ready to make offers. And so the bidding wars began.
“Affordable” single family homes ($200K-$400K) were under contract within hours after their first open house showings. Buyers were bumping into each other again and again as they traveled from one open house to another looking for an opportunity to present a winning bid. Over price offers and cash ruled. Frustrations ran high and buyers were left wondering if they would ever become homeowners. “Let it Go,” the song from the Disney film Frozen seemed to be the appropriate background music to play while driving from house to house. Buyers are wondering if they will ever be able to take more than a few hours to think about a purchase without losing their opportunity.
First quarter data indicated 1,425 homes for sale in Essex County, down 13.2% from the previous year. Medium sales prices were higher than in the first quarter of 2013. Low inventory, pent up demand and higher sale prices dominated the early spring market.
As you can see in the graph at the top of this page, 134 MLS sales of single family homes were reported in April for the Cape Ann communities of Rockport, Gloucester, Rockport, Manchester and Essex. Sale prices ranged from $143,000 to 4.8 million. Of those 134 sales, 67 went under agreement in 2 months or less. This short marketing time was noted in all price ranges.
Currently, marketing times of two months or less are reported for under agreement single family homes as follows:
Under agreement 2 months market time or less
Gloucester 46 26
Rockport 17 8
Essex 8 5
Manchester 14 10
Many properties went under agreement the day listed.
Should buyers continue to sing “Let It Go?” No, I don’t think so. Nor do I think buyers should feel pressured to make offers on properties that do not suit their families needs just to get in the game.
Now it is more important than ever for buyers to educate themselves as to market trends, true value, financing options and creative terms. Buyers need a strong advocate to help them put their best offer forward. When multiple offers are presented, a buyer may not be given a second chance to up their offer or sweeten the terms. If the property meets the buyer’s criteria in terms of preferred location, amenities, condition etc. the strongest offer possible should be presented. An educated buyer will be less swayed by emotions and the urge “to win at all costs.” They will know that if their offer is not accepted they have still done their best and will be able to Let It Go. They will also know, if given the opportunity to be in a back up position, their offer may be accepted if the first offer was made with too much emotion, less education and a strong case of buyers’ remorse.
I predict second quarter sales to continue to trend higher with short marketing time. However, if this frenzy creates more listings, prices should stabilize, and marketing time should increase somewhat. Educated buyers will gain from an increase in inventory and will be more than ready to make a move.
Post contributed by Diane Polley an Exclusive Buyer Agent serving clients north of Boston, MA.