Why Are We Back In Multiple Offers? Let’s Dive Into It.

Why are multiples back? What the heck happened? In Q4 of last year, we felt like the  real estate market was cooling off.

Then, all of a sudden we find ourselves in a multiple-offer situation again. This makes no sense, right? I mean think about it, inventory is up 22%. Multiple offers should happen when there’s not enough supply to match demand. If the inventory is going up there should be more supply. On top of that, there are fewer listings now than there were a year ago. That means we have fewer listings, but if inventory is going up, homes aren’t selling as quickly.

There should be less demand. But, it does make sense that we would see a scenario where year after year, we are down 24% with closings. So back to the original question, why the heck are we in multiples? Interest rates have dropped about one and a quarter percent, that’s a really big deal.

When the federal government was jacking up interest rates to contain inflation, we kind of went from 3% to about 7%.

Well, when things happen that quickly a lot of people kind of like lock up and freeze because it’s such a shock to see how much more expensive it is to borrow money. Now that inflation has calmed down a little bit, we’re starting to see that interest rates are coming down as well. Right now at the time of this blog post (I know it changes every day) you can get a 30-year fixed mortgage for just under 6%. That’s a great interest rate, right? What we’re seeing happen is that loan applications in January of 2023 versus 20 January 2022 are up 22%.

Remember, in January of 2022, none of these interest rate spikes happened. Not to mention, we were in a super strong market with lots of buyers. Now in January 2023, we are seeing more than we did in January 2022. So, we have all of these new buyers that are recognizing that there has been a drop and they are capitalizing on the opportunity.

This time last year, we were in the most acute seller’s market we had ever seen. Why?

Not enough inventory for sale. Interest rates have gone up so much, sellers don’t want to move. The only people selling are the people who have true motivation. Yet, you have all of these buyers that are recognizing the opportunity to buy for a lower interest rate. So, then we find ourselves right where we were last year in multiple offers.

Within the next two weeks, I am going to be sharing with you eight techniques that our real estate company uses to get almost 50% of our offers accepted. Keep an eye out and I will talk to you soon!