With spring here in all its bounty, it is time to renew, refresh and revive our understanding of what is fueling the ongoing market recovery.
First, tightened inventory levels combined with strong demand are fueling price gains in many areas. Second, consumer demand is shifting from distressed properties to conventional homes. Third, record-low mortgage rates and rising rents are supporting housing recovery.
Let’s check the local scene.
New listings in the Greater Chattanooga area were up 5.2 percent, to 1,083. Pending sales decreased 26.9 percent, to 424. Inventory shrank 9 percent, to 4,707 units.
Prices were stable as the median sales price remained flat at $130,000. Days on the market decreased 4.5 percent to 128 days, the 11th consecutive month of year-over-year declines. The month’s supply of inventory was down 19.2 percent, to 8.4 months, indicating that demand increased relative to supply.
On the economic front, things inched forward. We saw a minor but important upward revision to 2012’s fourth-quarter gross domestic product; growth that put us back in positive territory. Aside from what the market statistics reflect, there is additional evidence that the real estate market is back on track.
With the current low inventory of available properties, my fellow Realtors are reporting that they are again seeing multiple offers on listed properties. This is a trend that has been more or less nonexistent the last few years.
Speaking of multiple offers, this situation can be frustrating and potentially lead to misunderstandings between potential buyers and the seller. Consider the competing dynamics.
Listing brokers are charged with helping sellers get the highest price and the most favorable terms for their property. Buyers’ brokers help their clients purchase property at the lowest price and on favorable terms. Each Realtor, regardless of their side of the transaction, is required to treat all parties honestly while looking out for their client’s best interests.
Will disclosing the existence of one offer make a second potential purchaser more likely to sign a full-price purchase offer – or to pursue a different opportunity? Will telling several potential purchasers that each will be given a final opportunity to make their best offer result in spirited competition for the seller’s property – or in a table devoid of offers?
Although there is not a single, standard approach to dealing with multiple offers, there are fundamental principles to guide Realtors found in the Code of Ethics.
Realtors, sellers and buyers should bear in mind that in multiple-offer situations only one offer will result in a sale and one (or more) potential purchasers will be disappointed that their offer was not accepted. While little can be done to lessen the disappointment, fair and honest treatment throughout the process, in addition to open communication, will enhance the likelihood that all parties will feel they were treated fairly and honestly. In this regard, “… Realtors can take no safer guide than that which has been handed down through the centuries, embodied in the Golden Rule:
‘Whatsoever ye would that others should do to you, do ye even so to them.'” (from the Preamble to the Realtor Code of Ethics).
Don’t forget about Realtor Nationwide Open House Weekend, which is April 20-21. Contact a Realtor today to learn what houses will be open and that meet your wants/needs in your next home.