Think higher rates will slow down multiple offers? Not in The Woodlands!

Think higher rates will slow down multiple offers? Not in The Woodlands!

Last week was an interesting week in the mortgage market. Rates held steady between 6.97% to 7.05% up until Friday when they plummeted .24% after the strong jobs reports and collapse of Silicon Valley Bank.

Yet 38 homes went under contract, which was 20 more homes than the week prior. And of those...14 had confirmed multiple offers. Here's what I learned from my conversations with these agents.

Their sellers received an average 3 offers per home. This is actually a low estimate...a few agents did not respond to my calls or texts, but did indicate in the agent remarks that there were multiple offers with a deadline to submit the highest and best offer. Two agents confirmed multiple offers but did not want to disclose how many offers they received. Since 2 offers is technically "multiple"...I have to go with that for these homes. But my gut tells me it's closer to an average of 4-5 offers per home.

One of the most expensive homes also received the most offers, totalling 8 offers in hand. This may challenge what you may be hearing about the luxury market softening more than median price points, but that's not the case here in The Woodlands. Even during my February Market Update research, I broke down activity by price points, and found that $600,000 to $1M+ were selling faster and closer to their list price than homes priced below $599,999. The median price point year-to-date for The Woodlands was $541,000.

Important factors for sellers to consider if you are thinking about selling your home; every agent I talked to attributed their multiple offers to pricing these homes correctly and competitively, making sure they show well, and make sure they are in great condition. Overpricing a home or foregoing certain repairs or updates could put you at risk of sitting on the market longer and receiving lower quality offers.
In fact, one of the agents I talked to said her sellers wanted to price the home $10,000 higher and expected to negotiate well below their list price. But now they are receiving the original price they wanted by pricing the home correctly in the first place!

And for buyers, a lot of you want to wait until rates come down...but we're seeing multiple offers in a high interest rate environment. I don't foresee a situation where inventory climbs significantly in the next 12-24 months...so you can only imagine how hot the competition will be when rates come back down to the low 6%-high 5% range but inventory hasn't increased to meet that anticipated demand!

I will continue tracking multiple offer situations while mortgage rates and economic outlook are still extremely volatile. Thank you to all of the amazing agents who helped provide useful insight into what is actually happening in our market! While the overall activity may be the same, everyone has different and unique perspectives based on price point, location.