The two most popular questions Realtor/Broker Matthew Lehman has received in recent months: “Who are the buyers making up the strong sales activity?” and “Are all the locals just picking up and moving away?”
In response to the first question: Most buyers are families looking to become residents vs. second or third homeowners and an increasing number of buyers are coming from areas other than Southern California. I have seen a growing number of buyers from San Francisco, Sacramento and other parts of the state.
Also, upsizing: Many of the buyers are locals moving from smaller homes into larger ones, or from Sprinter Vans into more conventional living spaces. Lehman attributes this to the work/school from home environment and the resulting demand for more space. Also, there is an increasing need for more bedrooms as the pandemic may be contrbuting to a baby boom. Make room for the “Coronials!”
Not all sellers are staying in the local area or upsizing, says Lehman. A good number are simply moving out of state to more tax-friendly locales.
Interest Rates: Lehman contends buyers are looking to take advantage of record low interest rates. Even though prices are up, mortgage payments are down due to these low interest rates. With the stock market at record levels, a very divisive election year and much uncertainty given the trillions of dollars newly printed money, real estate may be a decent investment option.
Offers: The most interesting characteristic Lehman has seen in recent months is the structure of offers being presented to sellers, particularly “contingent offers” subject to the sale of the buyers’ home elsewhere. In other words, “we will buy your home, but only if our other home sells first.”
Typically, says Lehman, these are rare offers and seldom accepted by sellers. That said, it appears these type of offers have become much more prevalent in Mono County and even the norm over the past month or so.
The view from Bishop
Inventory has fallen to record lows according to Jake Rasmuson of Bishop Real Estate.
There were just 35 homes on the market in July and 30 as of the end of August. Two months ago, there were 40.
Contrast that to 63 homes on the market as of August 31, 2019 – a 52% year-over-year decrease.
Median days on market: 20. In 2019, that number was 29.
Buyer demand, says Rasmuson, continues to be very high, especially in those homes priced below $500,000. This is causing multiple offers and above-ask bids on a majority of properties. *Lunch anecdote: House across the street was on the market one day, had seven offers, and sold for $20,000 above ask.
Like Lehman, Rasmuson cited low interest rates as a driver, enhancing buyers’ purchasing power.
COVID combined with an large number of transactions have caused a the transaction timeline to be further extended. If you are getting a loan, gone are the days of the 30-45 day escrows. If you are buying or selling a house locally anticipate at least a 60 day escrow.