Family Members Say Wait to Buy?

By Todd Shea
2023 President
Santa Barbara Association of Realtors

I heard some discussion this week from an agent on our team working with a buyer. I wanted to pass this along as I thought it was a great case of where we are now. He mentioned that the parents of the buyers were saying to wait to buy. Which as a parent or family member, being protective of their kids or extended family from an outsider could make sense. But let’s dive deeper into this advice.

One focus of this advice was that rates were high. Considering that when they purchased, the rates were double digits is an interesting perspective in which they responded, “But the prices for homes were so much lower than.” Ok, yes, but let’s think about this. At that time, how much lower, 8-10-12x lower? If they had not purchased during that time with double-digit interest rates, would they not have gained 8-10-12x  equity in their home? This, in turn creating generational wealth that they are now using to help their kids purchase today and the rate they have refinanced over time. 

I would say there is not a buyer that I work with that, when getting into a transaction, feels a little stretched or concerned about purchasing a property. This could be due to various reasons but always reflects whatever is happening in the market. My favorite is that most of those buyers talking to them 2, 3, and 4 years after are so happy they moved forward with the transaction and are loving their home, doing renovations, enjoying their equity and other homeowner benefits, and so happy “they don’t have to buy now.”  

With a “frothy” market right now, I wanted to update everyone looking to buy and sell. Over the past 2-3 months, seasonality over the holidays, higher rates, low inventory, and a market seeming to slow down, not many properties had multiple offers; if they did, there were 2 to 3. There were and still are talks of recession which is understandable but also remember, recessions are usually months long and short-term pain or unknown.  The market is shifting so much lately. Over the past week, there were three properties with a combined 49 offers. 22 on 1, 18 on the other, and 9.  The interesting thing will be what is the delta of these multiple offers from the listing price to the final purchase price. Over the 2 years of the hot market, these multiple offers pushed properties up to $500- $1 Million over the asking price. I am not sure where these three will land as they are still pending, but I feel it will not be as high of a delta with buyers being a little more cautious when going above asking as they were in the past hot market.

Properties that are showing and performing are well-priced first and foremost. Agents that have homes selling are working hard with their sellers to price the homes according to this market and stay up to date on current trends and local statistics. Our local SBAOR and brokerages work hard to supply the agents with up-to-date statistics. Networking with other agents and teams reveals a clear picture of what is happening up to the day, as this information is crucial in guiding clients. Most of these homes moving quickly are well done as most buyers don’t have the cash to put into a large remodel after purchasing. If they need updating, the agents consider this with pricing accordingly. Local Real Estate agents are doing a great job counseling clients to prepare for the market and create successful outcomes not dependent on the condition of the home. Seeing multiple offers again on many properties is showing the strength of our market and the number of buyers still out there looking to purchase. 

Todd Shea is the 2023 president of the Santa Barbara Association of Realtors (SBAOR). He is a California licensed real estate agent with the Zia Group powered by eXp Realty here in Santa Barbara. He has served on and chaired several committees within the SBAOR and served on its board of directors. Todd can be reached at 805.453.7730 and todd@ziagroup.com or message and follow @toddshearealtor on Instagram.