Lack of inventory is a massive bottleneck in the current seller’s market. One home listed in December had nine offers in two days and went for $15,000 more than its asking price.
Keizerites are hard-pressed to find “For Sale” signs in their neighborhoods lately. The home pictured is one of fewer than 10 in the city.
As of Friday, Jan. 15, there will be a total of eight homes for sale in Keizer. That number is up by two from Monday.
“For decades we’ve watched our California neighbors deal with these kinds of housing markets: expensive prices, low inventory, homes sold with no inspection, no closing costs, and sometimes not even a physical walk-through. We, in little Keizer and Salem, are now them. Buckle up,” said Amy McLeod, principal broker for The McLeod Group Network.
Multiple offers in the first days on the market and homes going for more than the asking price are not uncommon, said Bob Shackelford, a realtor for HomeSmart.
“I listed a home in December and had nine offers in the first two days. It went for $15,000 over the asking price and the buyer took it as is,” Shackelford said.
A Keizer home is typically being scooped up within 13 days, but there’s another 45 days factored into processing loans and closing proceedings.
Aside from residential real estate, McLeod said there was a dearth of inventory across the board in Keizer: four pieces of bare land, two multi-family dwellings and two commercial listings. The shortage in inventory raised 2020 home prices 8% over 2019’s numbers.
The reasons for the low housing stock are multitude and historical.
Shackelford sees record-low interest rates as one driver of the current seller’s market.
The entire area is still experiencing fallout from the housing market crash of 2008, said McLeod.
“The real challenge is that the construction industry still has not caught up with producing inventory to match demand since the downturn of ’08. That financial event decimated their industry. Nationally, there is nearly a five-year shortage of new construction necessary to meet the national housing demand,” she said.
Baby Boomers looking to downsize, after having bought larger homes in the 1990s, are also not finding housing that meets their decreased needs, according to McLeod. Those circumstances have a domino effect limiting the availability of Generation X homeowners to move up and thereby reducing the stock for Millennial buyers.
Another factor limiting stock is fear on the part of sellers as to where they might end up if they sell their home.
“Some are moving in with parents or renting to reap the benefits of high price increase. They get the equity in these good times while riding out the storm hoping to be able to be ready to make an offer on a new listing when they come available,” Shackelford said.
Counseling sellers on the reason they want to move has become standard operating procedure for McLeod Group realtors.
“The days of putting your house on the market, getting an offer, and then having 15-20 houses to choose from are over, and over for the foreseeable future. Successfully finding your next home in the current real estate environment requires a dramatic paradigm shift, and will have to be fueled by a clear and driving reason to move,” said McLeod.
The low stock is affecting the new realtors as well. While both McLeod and Shackelford had banner years in 2020, they’ve seen newer realtors struggle.
“It takes a lot from a new agent to get their feet wet in this inventory. It’s a struggle to spend numerous hours with clients just to get beat out on a cash buyer, and very frustrating if you are helping a first time home buyer who might need help with closing costs. They usually don’t get the home,” Shackelford said.
For sellers, Shackelford’s advice was not to overthink the process. They may not need to do the repair or remodeling traditionally expected.
“Buyers will do those projects themselves if that’s what it takes to get the house,” he said.
McLeod expected an upward shift in interest rates with a new presidential administration on the cusp of taking office. It could cause prices to stall and lock more new home buyers out of the market with higher house payments.
“Timing the market, of course, is impossible,” McLeod said. “And you won’t know that you’ve missed the peak until you’ve missed it.”
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