Housing hardball
Low supply, low interest rates, rising prices
Forget lowballing. The housing shortage has sellers and buyers both playing hardball.
Multiple offers have been the rule, not the exception, at entry-level and move-up price ranges. Houses have been selling for more than their appraised value. Some buyers are buying houses sight unseen.
All during the coronavirus pandemic and weakened economy.
Record low mortgage interest rates — under 3% on average since mid-July, according to Freddie Mac — have loaded buyers with more buying power, and they're using it, said Kirsten McIntyre, an agent with Keller Williams Central Oklahoma, 10 E Campbell St., Edmond.
She and her husband, Randall Gantz, also an agent, have seen these kinds of transactions:
• A house in northwest Oklahoma City was listed for $128,000. Their buyer offered $134,500 cash, and missed it by $500. The house sold for $135,000 in one day after 18 offers.
• A house in Choctaw was listed for $193,000, appraised at $193,000, but sold in two days for $201,000.
• A house in Guthrie was listed for $250,000, appraised at $255,000, and sold for $265,000.
• A house in Edmond was listed for $550,000. The buyer offered $550,000. The house sold for $565,277 in one day after five offers.
“Obviously, it's still a sellers' market. Obviously, it's still an aggressive sellers' market, at that. And interest rates are still amazing,” said Tiffany Elcyzyn, an agent with Prime Realty Inc., 1530 SW 89, Suite A1. “What I'm seeing is people capitalizing in the equity in their house, cashing out on
that equity.
“If they bought their house four or five years ago, they might be locked in at a 5 or 5 1/2% interest rate. They're upgrading that — let's just say a $ 200,000 house to a $450,000 house — and they are literally making al ateral move in their mortgage payments.”
The corona virus and its effects on the economy could be keeping some would-be sellers sidelined and their houses off the market, though, said agent Caitlyn Mathers, with Metro Brokers of OK Elite, 3750 W Main St., Suite No. 105, Norman.
“I think the shortage of homes is potentially because of the uncertainty in the economy right now. People would rather stay until they feel comfortable that they will not be losing their jobs etc. It may also be that they do not want a lot of people in and out of their homes for fear of coronavirus.”
Bidding wars and low inventory—just a 1.3month supply at the end of September — are lifting the whole market, according to t he Oklahoma City Metro Association of Realtors.
The median price in September was $214,515, up 13% compared with September 2019 for houses sold by Realtors in Oklahoma City, Arcadia, Beth any, Blanchard, Choctaw, Deer Creek, Edmond, Har rah, Luther, Midwest City, Moore, Mustang, Newcastle, Nicoma Park, Norman, Piedmont, Tuttle, W arr Acres and Yukon, the Realtors reported.
The average price was $248,311, which was 12.7% more than the year before.
Nationally, both purchasing and refinancing remain above last year' s levels but flattened slightly the past couple of weeks. The Oklahoma City market could be taking a slight breather, too, Elcyzyn said.
“Things have slowed down just a notch. We were at a cut-throat point these last few months where, literally, if we did not write offers sight unseen, before we were able to even get into the door, we might not stand a chance of getting into the multiple-offer situation that's coming from the buying side,” she said.
Sellers are sitting pretty, if their houses are, Elcyzyn said.
“If your house is HGTV show-ready, and priced right, there's no issues with getting it to sell because the market is completely conducive for properties that are turnkey and move-in ready, she said.
Elcyzyn said buyers are figuring out sellers.
“We are seeing buyers become more knowledgeable in the fact that sellers are getting what they want out of their properties, and so if they're going to offer full price, they're going to expect for that property to be at its highest and best state. If they're going to offer highest and best price, then that property needs to be in highest and best shape,” she said.