What a Market Shift Truly Means

by Anthony Sole

MARKET SHIFT...What does it mean?

Crystal Peak Lodge - New Price of $2,649,000

The market in Summit County has shifted... Well so what? Does this mean I should wait to get a killer deal? Does this mean I cannot get top dollar for my property any longer? No...and yes?

Look, I do not have a crystal ball, but what I do have access to is data. Data that shows the housing market is not in a "bubble" and that this recession (or wait, is it a recession anymore?!?!) is not bad.

Yes, there are price reductions going on around the country (and here, by the dozens) and yes there are certain markets that are tanking, but by in large, especially here in Summit County, prices are continuing to appreciate. Let me explain:

We are seeing a massive amount of price reductions as well as a huge influx of inventory: 640 listings as of today compared to 170 back in the month of May. Less than half the pending deals that we saw this time last year, interest rates at 30 year highs (still historically low - side note: a lender of mine locked someone in the other day @ 4.99%) and record high inflation of 9.1% so it is natural to think that waiting, as a buyer, for a good deal to pop up is a smart idea or holding back on selling your property may be better as you can't get top dollar anymore.

Let us get one thing straight, if you are looking for a deal in Summit County where you can put 20% down, get a screaming deal that is a revenue generating monster and will cash flow then go home...Seriously. Because those days are long gone and are not coming back. And if you think that someone will part with their home for 20-30% less than the market median... If you are willing to leverage a lot more you may be able to break even and cash flow eventually, but that is a topic for a different discussion.

What we are really seeing is that sellers are overpricing their homes in the hopes to get someone to overpay for a property that was never worth that number in the first place and I get it. Classic FOMO (Fear of missing out). Sellers were getting over ask/multiple bids on their listing within hours of making it public for the last 24 months so why wouldn't sellers continue to do that. The problem is the fact that interest rates doubled. And yes we have cash buyers that are not concerned with interest rates, but they are concerned with macro economics. If money costs twice as much as it used to, then buyers with loans will not be able to afford as much property causing prices to fall, inventory to rise and cash buyers will recognize this as a way to under leverage and wait for that "deal..." keep dreaming!

Sooo we are kind of in a grid lock situation. Sellers still want over valued prices and buyers want a better deal. Buyers you are not getting a better deal, and sellers you are not getting over valued prices any longer. This is a new benchmark for Summit County. My best guess is that prices will continue to reduce only to match what normal appreciation has been pre-pandemic which is right around 4% meaning values WILL NOT GO DOWN!

Sellers, you can still get an incredibly great number had you bought pre 2020. Maybe not over ask/ multiple bids, but if you were to compare what prices are going under contract for today as opposed to 2019, you would be grinning from ear to ear.

Buyers, put yourself in the seller's shoes, 5 years ago, when they were buyers and prices were "high." Those folks were in your shoes 5+ years before that and so on (Obviously we have had housing crashes, trying to time the market is near impossible). Investing for the short term does not work here in Summit County. We are not a need to have market, but a want to have. People come here to make ever lasting memories with their families and friends and to get away from every day life. We will always have a higher demand than there is supply. My suggestion to you is to not look at property here as an investment for cashflow, appreciation or short term resale. Look at property here as an investment for your well being, your family, relaxation, lifestyle... Look at this as an investment for YOU. Enjoy it and make those memories with your kids that they can pass on to their friends and family. And before you know it you will be like the sellers of today, grinning from ear to ear.

As you can see from this graph prices have dipped recently, but that is because sellers are trying to overvalue their properties. Year over Year, however, prices are still up.

Please take what I say with a grain of salt as I cannot predict the future. I base everything I say off of precedents and data. Adjusted for inflation, real estate values have only gone down once in the last 30 years. ONCE. Pending any natural disasters, world wars, god like events, etc. chances are that prices will continue to go up.

What a Market Shift Truly Means

by Anthony Sole

MARKET SHIFT...What does it mean?

Crystal Peak Lodge - New Price of $2,649,000

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