The good news is that I wrote a new offer over the weekend for a client who wants to buy a house. If the deal goes through, it would be my first sale since I started my real estate career last fall.
The bad news is that even some veteran agents say the market seems to be slowing down.
If the market is cooling, you sure couldn’t tell so by looking at the numbers. The National Association of Realtors says that nationwide sales are still in record territory, and the figures reported by my local board are still strong.
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Yet, signs of a slowdown–at least, in my own area–are gradually beginning to appear.
Homes that would have quickly received multiple offers just a few months ago now sit on the market for weeks. Some of the best agents I know complain that fewer people are coming to their open houses.
And remember, this is the spring. It’s supposed to be the busiest time of the year for sales.
Other signs of market slowing are subtler, and some can’t even be seen by the general public.
Last week, I embarrassed myself a little by introducing myself to someone whom I had never seen in our office before. I asked if she was new to the business, like me. Turns out, she’s actually been working for our company for several years and is quite a successful agent–but has been so busy that she hasn’t had the time to stop in during normal business hours.
Other agents have a lot more time on their hands, too. At our recent office meeting, nearly 30 salespeople showed up. Just a few months ago, there’d be only five or six because everyone else was out doing deals.
More agents are also signing up for “floor-time.” That’s Realtor jargon for volunteering to answer the office’s phones and to help potential buyers who just walk in from the street.
I’ve worked a lot of floor time since I got my license last fall. You don’t get paid for it, but it’s a good opportunity to meet prospective clients.
Most of the top producers in my office haven’t volunteered for floor time in months because they’ve been busy with clients of their own. But now, even they are beginning to sign up for 3- or 4-hour shifts in the hope of picking up some new business.
Home builders are getting cautious, too. I read recently that some of the nation’s biggest tract builders won’t even start construction of a home anymore until a customer has signed a contract to buy it.
No one I’ve talked to is quite sure why sales seem to be slowing. Some of my co-workers blame it on the recent rise in mortgage rates.
Others say it’s because the overall economy is sluggish, or that people are so nervous about everything from rising gas prices to the upcoming elections that they just don’t want to take on a 30-year mortgage commitment.
But one of the best theories I’ve heard is that, as one agent said, “the market is collapsing from its own weight.” Prices have gotten so high, he says, that we’re finally reaching the breaking point: Too many people just can’t afford to buy a home, and many of those who can are deciding to wait because they think values may have peaked.
In its own way, the market is helping to correct itself. Over the past month or two, a handful of deals in our office have fallen apart because their appraisals didn’t come in high enough to justify the agreed-upon sales price.
I’m no economist. But it stands to reason that if appraised values can’t catch up to sale prices, then prices themselves may have to level out–at least for a while.
It’s a pretty safe bet that the increase in mortgage rates that everyone seems to expect won’t help matters, either.
I’m not worried that the housing market is going to fall apart overnight. But I do worry about how even a modest slowdown might affect my own chances of success.
If I haven’t been able to sell a home in the hottest market in history, how will I fare when things finally cool off?
I’m afraid I’m going to find out, sooner rather than later.
Got tips, ideas or advice for the Rookie Realtor? Send them to Rookie@inman.com.