Location, location, location

You don’t have to be looking to buy or sell a home to know there’s a nationwide problem with the housing market. Of course, some locations are stressed more than others. And the stress spills over into the rental market. 

I’m certainly no expert. We lived in our first house for 35 years. That was the only house we’ve sold. And both that house and the one we replaced it with were purchased without ever going on the market. The first we bought directly from the seller, without an agent. The second we bought with the help of buyer’s agents who worked for the same company as the seller’s agent. When we sold the first house, the buyer wanted us to take $25K off the asking price because the 95-year-old house had live knob-and-tube wiring. We haggled him down to $17K, but we’d already bought the replacement and needed the cash. We paid cash for the second home without getting an inspection and ended up making about $25K worth of repairs after moving in.

Home prices are way up from the pandemic low. While some argue that they’ve merely corrected to the historical average, it sure doesn’t feel like that to buyers and sellers in some markets. Both are walking away from deals.

“Buyers, many of whom are struggling to afford record-high home prices but feeling emboldened by having more inventory to choose from, are proving increasingly willing to end contract negotiations when they disagree with sellers over things like presale repairs.

“A portion of sellers, meanwhile, have hefty equity positions and low mortgage rates that leave them in no rush to move. When contract negotiations hit roadblocks or they can’t get the price they want, many sellers simply pull their homes off the market.”

How serious is this? What are the numbers?

“Last month, 57,000 deals — 15% of all homes that went under contract — fell through, the highest share of canceled deals in June going back to 2017, according to Redfin. The brokerage cited factors like financially stretched buyers and ongoing economic uncertainty for the spike.

“Delistings, where sellers take their homes off the market without a sale, are also on the rise. They jumped 47% in May from a year ago, outpacing recent inventory gains, according to Realtor.com. This move suggests that many sellers would rather stay put than adjust to current market dynamics.”

Of course, for folks in places like San Francisco, NYC, Boston, Washington DC and Vancouver BC, this is a familiar story. There’s just not enough new construction coming online to sate the demand. Eventually, things will sort themselves out, maybe with the next recession.


https://finance.yahoo.com/news/canceled-home-sales-surge-as-fed-up-buyers-and-sellers-walk-away-120010066.html

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