As we head into the final weekend preceding the final work week of April, and the $8,000 1st time homebuyer tax credit winds down (thank God), I’m seeing a surge of new Austin real estate listings coming on the market each day as well as a huge increase in the number of showings for most of our own listings.
In other words, supply and demand are in a foot race with each other, and both have kicked in the after-burners.
This has caused us, as real estate agents, to behave in abnormal ways as we advise buyers and sellers. I had to tell a seller last week, “I think it’s better that we get your home on the market right away in ‘good enough’ condition rather than burn up a week of market time putting it into ‘perfect’ condition”. Mainly, I didn’t want to burn through one of only two remaining weekends waiting for new flooring to be installed or our professional stager and photographer to do their thing.
Instead, Sylvia staged the house herself, the seller bought some mulch and plants, we left some worn out old sheet vinyl on the kitchen floor, didn’t have the carpets shampooed, and I took my own photos, which look ok but not great. We got that sucker listed and in the MLS 2 days after I first met the seller at the property. Met on a Monday, had it in the MLS on Wednesday. Had our first offer that weekend, though that one didn’t pan out because it was too low.
Why the rush, and is this the right thing to do? I don’t know.
I think it’s probably the right approach, but as I said in an email to one of my sellers, “I confess that government intervention in the real estate market has rendered me stupid. These are my best guesses”.
Normally, we’d never rush a listing onto the market. We always preach that it’s best to NOT go on the market until the home is fully and completely prepared, landscaped, staged and professionally photographed because first impressions matter. But with the tax credit ending, buyers are swarming the cheaper listings. Would it therefore be unwise to forgo a week of market exposure in favor of prettying up the place a bit more? Yes, I think having the home available for buyers to see for a longer period of time is more advantageous to the seller than coming late to the party impeccably dressed.
How do we make decisions under abnormal circumstances? We try to make the best judgement calls possible. That means asking the right questions. For me, it’s easier to ask “which wold be worse?” rather than “what’s the best approach?”. To me, losing market exposure hurts more than anything else. We know the tax credit is ending. On May 1st, if we have no offer, we can always hit reset and re-prep a home if needed. So wasting 5 or 7 days and one of the last two weekends seems like the worse choice to me.
And I don’t like not knowing what will happen May 1st. Is the market going to come to a screeching halt that day, or have we given too much credit to the amount of activity being generated by the tax credit buyers? Are these first timers 10% of the showings or 50% of the showings? On listings priced less than $200K, I’m betting a high percentage of buyers are motivated by the tax credit simply because no other obvious motivation exists. If not for the tax credit, what other economic news or condition would be causing gobs of buyers to be out looking at cheaper listings?
So my best guess is we’re going to see a record April and a dead May. Just my guess. Who knows for sure? But if you’re a seller thinking of getting your sub-$200K home listed in the coming days, better get after it. The final weekend for first time buyers is upon us.