I frequently receive calls from clients wanting to know what really is happening to pricing in the real estate market as they read all sorts of reports about a "shortage of inventory", and how dire the market is for buyers. Many listing agents use that information to rush buyers into a contract by stating that they have "4 or 5 other buyers interested in the property", which may, or may not be the case. I admit that it is a little hair-raising to call their bluff as I really don't want to lose a house that my client is interested in. But at the same time, I don't want my buyers to pay top dollar for the house either, even if the comps warrant the price. Many folks think that the listing agent will share the offers that they have with me, but that is really contrary to their clients' best interest, so that is not on the table. The same applies to a bidding war, whereby the seller has received a number of offers and is calling all the agents involved and requesting their clients' "Highest and Best Offer". Once they have settled on a buyer, they will no longer negotiate with the others. Many folks think this unfair as they are unable to raise their offer as there is no divulging the top offer. What I find though is that if I have a good idea of what pricing is doing in my neck of the woods, I can inform my clients who can then make a decision based on that information.
So what are the trends in pricing?
Most reports state that there is a shortage of inventory. However, like any other market, the pricing is a function of supply and demand, right?
Well, how then can we have a market wherein pricing has hardly moved up over the last 12 months and still have a shortage of inventory?
Because of the housing market that I specialize in, I have attached a graph for houses in the following price brackets (Sold prices):