Scott Varley: ‘Experienced Agents Like Me Know How to Handle Market Shifts

By Scott Varley from The Scott Varley Team.

With more than 30 years in the business, and more than $1 billion in sales, Scott Varley has been through several boom and bust cycles. He knows how to read and react to shifting markets.

Here, the Keller Williams associate broker discusses this current market downshift in comparison to previous shifts.

1. How do you compare this market shift to previous rocky housing cycles?

“What we saw before and what we’re seeing now to indicate the shift that are the same are:

• A radical increase in listing price reductions

• A major decline in multiple bid offers

• The business of new agents is starting to decline due to their lack of skill about how to handle this market shift

“What’s different is a radical rise in interest rates, something we didn’t really see during the last shift. This time we know that government intervention with planned and deliberate increases in interest rates is designed to decrease real estate values to stem the out of control inflation. “

The Federal Reserve’s Intervention is a Deliberate Move to Erode Home Pricing

“Bottom line: We know home prices will continue to erode until the inflation rate returns to normal. This means that everyone knows the interest rate today is less than it will be in the next year.  To repeat, we know that property values as a whole will be less than they are now.

This gives buyers and sellers a chance to make their moves with eyes wide open. It’s really an incredible time to make a move in real estate knowing the results of what you do now versus waiting for further erosion.

2. How can sellers handle this market?

“In any market, houses always sell for life reasons: A job transfer, a death, growing family or downsizing. These life reasons are ‘ignorant’ of the market.

“What home sellers need to understand right now: Regardless of why they’re selling, we are coming off a market high. That generally sets off a 10-year cycle of high prices down to lower prices before a shift takes place again.

“Coming off a high means that now it’s going to take about five or so years before we hit this cycle’s low. So waiting to sell for the ‘best price’ is NOT a good way to go, especially if you need to sell for any significant life reason. In fact, you may want to accelerate your sale, since it could be a good 10 years for this next cycle to work itself out.”

3. How can buyers best handle this market?

“I hear a lot that buyers are going to wait until the market goes to a low. That would be great if the only reason they are moving is to get a cheaper price.

“However, if buyers are seeking a mortgage, then the ‘cheaper home price’ may not be so cheap due to rising interest rates. At the end of 2022, the Fed is expected to raise rates again. That will further push interest rates towards double digits. That could mean buyers should accelerate their search, and lock in interest rates now.”

Working With an Experience Real Estate Agent Will Save You Time and Money

“The most important tool any seller or buyer can have is working with an agent who knows his or her history. Experience reacting to and anticipating market shifts, especially in a downturn, is critical. That’s why I keep my door open at our 382 Broadway office in downtown Saratoga. We are here to help, especially right now,” Scott Varley said.

CLICK HERE to find out more about Scott Varley and his amazing team.