If the sales market is strong, the rental market should be weak. If the sales market is weak, the rental market should then be strong.
Most of the time, it looks that way. And right now, it would appear, by most metrics, that the sales market is softer, and the rental market is extremely strong. So there is that. Let’s see what other things are happening in addition to the topline:
The stock market is back up super-duper close to a market peak
Buyer are ALSO nervous about recession (read here)
Sellers who have been on the market seem reluctant to reduce prices. THIS IS THE BOTTLENECK, my friends.
New sellers seem more inclined to come to market lower, and are even seeing bidding wars when they do.
New sellers who bought in 2014-2016 who want to upgrade are often getting comfortable with the fact that they’ll likely lose a little bit on their sale.
Some sellers who bought in 2016/2017 and want to sell today are often taking a bigger loss.
MOST IMPORTANTLY: Buyers want to buy.
most buyers these days, licking their chops
At the same time, I’m hearing (or reading in emails) from buyers that “I’ll see it once there’s a price drop,” or “It’s so overpriced.” On the sales side, I’m hearing, “I thought we priced it perfectly” from fellow agents, after their listings have sat on the market for months. The one I’m hearing mostly is “bring me an offer.”
At the end of the day, I have to ask sellers how serious are they about selling. With a lack of urgency in the marketplace, but with buyers who are figuratively licking their chops, the pricing strategy has to be conservative.
Give buyers a reason to make an offer! Price low, get lots of people in an apartment, and get some momentum going. This seems to be the winning move today. -S