Seize your Bargaining Power


Click for brief 2-min video


The WSJ/Mansion Global article (February 2) provides an interesting real estate overview using nationwide data from Realtor.com. It is titled Home Buyers Are Looking at Far More Bargaining Power. You should check it out, and I have provided the link below. But I would be cautious about over reliance on this information in the Middle TN marketplace. I would also caveat that its usefulness has a limited time horizon. If you are considering a home purchase, action in February and into early March would serve you well.

The article contends that buyers today have far more bargaining power than during the housing run up to May 2022. That the number of homes for sale, which across the country soared 65.5% year over year, gives buyers more options to choose from. Therefore, buyers have a negotiation platform so different from the fierce competition that helped push prices skyward over the past two years.

All true on a general basis. However, in Middle TN, the soft market we experienced in the latter half of 2022 is already showing signs of a bottoming out, moving from buyer strength to one favoring the seller, again.




Available Inventory - Tightening w Emerging Demand

Pending sales figures in December and January increased slightly in our region, lowering the available inventory from 4.4 months worth in November down to 3.3 months in January. Homes caught in the end of year 2022 doldrums are being sold off and replaced by an uptick in fresh new listings (20.3%).



Use your Bargaining Power - Seize the Day

Now there are several reasons to be an optimistic buyer at the moment. Take advantage of the present opportunities:

Inventory - Listings newly active in January and February provide you with fresh options. And the competition of added inventory creates negotiation possibilities, particularly on homes with a high days on market history stretching back to Fall 2022.

Borrowing - Mortgage rates have been trending down. The 30-year fixed-rate stood at just over 6% last week, down nearly a full point from November.

Pricing - We have seen a drop in the median selling price by 9.6% in Middle TN since the high point in May 2022. Keep in mind that we still show an annual appreciation of 6.3% in our region.

However, my sense is that this environment of moderation will be short lived. Pent up demand (including homeowners with equity and looking to step up) will return swiftly. Seasonality will also come into play as we move toward the spring and early summer, leading once again to buyer competition.

My message. If you are considering a home purchase, better to act soon.


Click for WSJ / Mansion Global Article



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