As the old adage goes, I know when the market is correcting when listing agents start to call me back.
Over the last month I have had the opportunity to work very closely with a client searching for a condo in downtown Vancouver. His search was up to $1M. Over this time period I wrote three offers for him and we viewed over 50 properties.
There have been countless news headlines over the past 10 years about the market correcting, or even crashing (we know that the media loves hyperbole). It is one thing to read about it or hypothesize about it, and another thing to experience it first hand.
This past month I had a front row view of seeing the market correct in real time. It was interesting to see how sellers and listing agents handled this change.
Our search started out with listing agents setting a hard date for offers, sometimes with only a week from when the property was listed. This strategy has worked well in the past to create urgency and “bid up” the asking price. I have used it with my sellers in the past with great success, as you truly find the market value when there is some competition.
In this past month I have seen this strategy start to backfire. Instead of 5 or 6 offers, sellers started to receive two offers and sometimes sell for under the listing price. Two offers, often with subject conditions, may not be enough to drive a price upwards in a softening market.
About half way through our search we started to see price reductions and the “offer date” strategy ceased to exist. Sellers started looking at offers “as they came.” My buyer was in the driver's seat at last!
My buyer ended up purchasing a home for about 10% to 12% less than he would have paid for it just 4 weeks ago. This is substantial on a $800,000 asking price.
It is so rewarding to work hard for a buyer in a falling market. Especially a client that recognizes your efforts and makes the process challenging but at the same time lots of fun. Nothing beats the feeling of negotiating a deal for a buyer and finding the perfect property at a great price.
Let’s see what the future holds for Vancouver real estate. My feeling is that the market should continue to adjust downwards as interest rates rise and more housing hits the market.
If you are searching for hard working real estate don’t hesitate to call me anytime at 604-808-9796. You can learn more about me by following this link.