The real estate market changes during the holiday season and it effects buyers, sellers and realtors alike. First I will address the home sellers. If you are serious about selling during the holidays it is not a time to coast along and hope for a buyer. We see homes in Woodland Hills that have been on the market 180 days. There needs to be a much more aggressive plan in place by your real estate agent to target and locate motivated buyers in a market with fewer participants. You need to have serious conversations and honest feedback with your realtor about what is the correct pricing. Many agents lead their clients to believe something that is very optimistic and a slower market is not the time to overshoot. It does not mean you have to price low but you do have to price correctly. There is currently a $2.8 million home on the market in Calabasas for $4m. I predict a slow holiday season for them. The next factor is availability. We have a buyer that we have been trying to show a house in West Hills for 3 weeks. If you want to sell during a slower season you cannot make the home difficult to see. Yes, it is understood that you have holiday events and other things to attend to but with fewer showings and slower open houses it is best to be more available more often. The most common thing sellers do for their own convenience is postpone their sale until January which always comes with the question “Do you think prices will be better in the new year?” If the prices were always better in the new year, I would tell all clients to take their homes off the market and wait. I would also sell my own real estate investments every spring and buy them every fall. Unfortunately, that is not a prediction we can make. This year I will state as fact that I think prices will be the same or slightly less in the spring. The election, rising rates and uncertainty around the economy may create more headwinds than not. Rising rates may not be as much of a factor on multimillion dollar Calabasas estates but the first time home buyers in Woodland Hills may get priced out fast. I am not anticipating a downturn but I would not bet on things being more expensive. If you need to sell take the money. Prices are at a high point relative to the past 8 years.
How does the holiday market effect buyers? Funny enough, the same way it impacts sellers. Buyers often feel that they are entitled to a great deal because of the season and they often overestimate what that should be. Many buyers have huge discounts in mind but don’t realize that getting a property at more than a 5% discount is very unlikely in any market. We just encountered someone offering 25% below list price on a home in Woodland Hills. That is not realistic. What you need to realize as a buyer is that you have the ability to negotiate and get a better deal than you would at the height of the market. Every year we see buyers try to negotiate deep discounts unsuccessfully only to end up losing out on multiple offers as the market picks up later. The Mulwood section of Calabasas has multiple offers every spring no matter the price point because of low turnover. The distractions of the holidays also keep many buyers from finding the deals they seek. There are always buyers for a good deal and like sellers who don’t have time to show, buyers who don’t have time to look will miss the hot picks. Buyers who wish to postpone their purchase until the new year always ask “Do you think there will be more homes on the market in the spring?” Yes. More homes, maybe higher rates, maybe you will be affording less. Let’s hope not too much less.
The last but most important segment to look at is how the season effects realtors. Many sellers cannot sell during the holiday season because their agent is checked out. We ran into a Calabasas agent this week who does not hold open houses in December. Really? Real estate agents need to work harder than ever. They need to have honest conversations with their sellers and their buyers about prices and realistic expectations. They need to be available more often even thought their own families have events and celebrations. They need to do more open houses, have more showings, make extra phone calls, do additional marketing and more follow up. For realtors, buyers and sellers alike the best thing they can all celebrate is a successful transaction. I assure you that a big home sale or purchase will make you happiest of all.
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