Navigating A Softer Market - Tips for Sellers and FSBOs

 

The Catskills real estate market of 2020-2021 was a summer thunderstorm: everyone got drenched.  The fall and winter 2022 market is more like a rainy autumn day. The rain is still falling, but not for everywhere, and not all the time. There are plenty of dry patches.

I have seen analyses that say the sellers' market is continuing, and I think that's overstating reality. But I also do not see values dropping in upstate New York as they are in some parts of the country. We seem to be insulated from the worst of the economy's mood swings.

The fact that values in the Catskills went up by a third or more in the past couple of years is bad news for first time homebuyers and many locals. It's not a wealthy area, and people who live here tend not to be making six figure incomes. So for them, this is a hard time, no doubt about it.

Downstate buyers are still looking. I hear from them just about every day. And they want to buy. But they're far more cautious than they were a year ago. And in the past few months, they've been predominately cash buyers.

Interest rates finally stopped heading skyward in the past week, and that may signal another shift. Many buyers who need to borrow to buy a property backed off. I suspect they'll be back. Interest rates around six percent feel high after that brief, heady time when mortgage rates were two percent and lower. But we knew it couldn't last. And compared to the eleven percent that homebuyers paid thirty years ago, interest rates are still low.

The good news is that a lot of retirement age people are taking advantage of the increased values and selling their homes to move somewhere that has milder winters. That's opening up some opportunity.

However, many sellers refuse to adjust their inflated prices to better match current demand, and that's slowed things down, too.

 A sellers' market exists for a few select properties. The ones in excellent condition. The cream of the crop. The ones that offer what everyone wants and are priced fairly. A well priced, well-presented house in very good condition still sparks a frenzy of offers, most of them cash. Those properties, however, are rare.

The market traditionally slows down from Thanksgiving into the New Year. That never really happened in 2020, but it appears we are finally settling back into a more normal routine.

Overpriced properties are still for sale and many of them are reducing their prices. Properties that need work aren't selling quickly. 

In addition, For Sale By Owner (FSBO's) are finding themselves at a disadvantage after recent changes at Zillow.

At first, their listings popped up right alongside properties listed by Realtors. Now, as the result of changes on the website, they are in a separate category and a different tab. I've had many people unable to find them, simply because they don't know where to look.

There are local FSBO's in this area that have one picture of their property online. And sometimes it's a satellite photo. Others have nothing but exteriors. Or interiors. Or interiors showing all the clutter that we know is part of daily life, but makes a house look small, tired, and dark. 

Some sellers are trying out a hybrid version of a FSBO, which is a company that puts your property on the local MLS, charges you half the usual rate (or less) and leaves the marketing, showing, and negotiating to the seller. The catch is that they don't know your property, the area it's in, or the market, much less the local MLS. So their listings have sat online with no activity because they've been miscategorized by the company, and sometimes because the unprofessional pictures and description simply aren't appealing. 

I expect it's going to be a quieter real estate market for awhile. And I also suspect most sellers who try to save money up front by doing it themselves are going to, eventually, realize that if they want to stand out, they're going to need professional help.

A lot of Realtors who joined the field during the boom are already leaving. But the really good ones will be fine, and they'll be around. Find them. Talk to them. In the end, they'll optimize your profit. That's their job.