I was representing a homeowner in a recent sale, and we were in escrow on his house. After the buyer’s inspection period, the seller expressed great surprise when the buyer wanted to negotiate the
3 Possible Reasons For Tepid Buyer Demand In 2019
A side by side comparison of real estate sales in Siskiyou County over the past two years shows that buyer demand has been quite a bit lower in 2019 than in 2018.
Total sales volume for the entire year of 2018 was $325 million. Compared to 2019 at the beginning of Q4, when total sales volume was $248 million. Of course, we still have 3 months to go, but that’s a difference of $77 million in sales, which is just under 24% less than last year.
So, what are the Buyers waiting for? Mt. Shasta Realtor, Nikolas Allen, with J. Harris Real Estate examines three possible reasons buyers are sitting on the sidelines.
Buyers are waiting for mortgage interest rates to drop
We actually heard a lot of noise about rising interest rates back in the beginning of 2018. They peaked at around 5.1% in July 2018, but since then have come down again. Currently, the average rate for a 30-year fixed rate mortgage is 3.99%. That number may increase slightly based on certain factors, but rates are still well below 5%, and rather than dropping any further, the are more than likely going to stay steady.
Home prices are too high!
Many buyers are waiting for prices to drop, which is a great reason to hold off on buying a house. In fact, the market did see a lot of ambitious sellers coming on the market strong in the spring with high list prices, but the buyer demand has been a bit soft all year long. Therefore, we’ve finally started to see price reductions throughout the county as we approach the winter season. That makes Q4 a great time to buy because the inventory that’s still left will have reduced pricing, anxious sellers, and perhaps a little more room to negotiate. However, if you wait too long, the spring season will hit, and the prices will rise again.
There a recession coming!
Anybody who watches the news, or the stock market has surely heard all the bluster about the impending downturn being predicted for 2020. And, hey, that stock market is pretty smart…it has predicted 20 of the last 4 recessions! Truthfully, we don’t have a crystal ball, and we don’t know how the market will fare year after year, so we continue to keep calm and carry on.
If it makes sense for you and your family to take a wait-and-see approach, then more power to you. If, however, you decide to take advantage of the lower prices available and are ready to make a move in Q4, feel free to reach out any time, and I would be happy to help you achieve those goals.
In 2015, I bought my first home in Mt. Shasta after decades of renting and fell in love with the experience of home ownership. I got my real estate license so I could help other home buyers and seller....