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NW Guilford’s ‘really crazy’ housing market
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Buyers are offering more than asking prices for homes and are putting down nonrefundable fees to stand out among bidders in the housing shortage
by CHRIS BURRITT
NW GUILFORD – When homeowners ask Stokesdale real estate agent Dawn Stone to sell their houses, she responds with a question: Have you secured a new place to live? If not, she advises them to reconsider their desire to move – at least for now.
The shortage of houses for sale in northwestern Guilford County has led to an escalation of prices, tempting some owners to consider listing their houses without thinking through all of the consequences. In some cases, sellers who pocket more money than they had ever imagined turn around and spend most, if not all, of their proceeds on new houses, according to Realtors.
“They may sell high, but they’ve also got to buy high,” said Stone, who owns A New Dawn Realty with her son, Phillip Stone. “I’ve never seen the inventory of houses so low. If there’s ever been a time to push up pricing, now is the time to do it.”
Buyers paid more than asking prices in Oak Ridge, Summerfield and Stokesdale in the second quarter, according to the Greensboro Regional Realtors Association (GRRA), citing statistics from the
Adobe Stock photo With what many Realtors are referring to as a “really crazy” housing market, it’s not uncommon for sellers of well-cared for homes to receive multiple offers – and above the asking price – within a day or two of going on the market.
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Sellers received 100.8% of list prices in the three towns in the quarter ended June 30, GRRA reported. A year earlier, sellers got 97.7% of asking prices in Oak Ridge and Summerfield and 98.7% in Stokesdale.
Average sales prices have jumped over the past year. They climbed 22.9%, from $429,180 to $527,382, in Oak Ridge and Summerfield in the second quarter from a year earlier. In Stokesdale, they increased 18.9%, from $308,833 to $367,052.
GRRA didn’t indicate whether actual prices had previously exceeded asking prices in northwestern Guilford County, but several real estate agents we spoke with said they didn’t remember such an occurrence.
“There have been some times of low inventory and hot competition, but not with buyers paying way over list price,” said Allen Tate Realtor Bobbie Maynard, an agent for 35 years.
The housing market was “busy, busy” around 2005, but most sales were around asking price, according to Gail Kerber, owner of Kerbappeals Real Estate in Stokesdale.
Back then, potential buyers had the opportunity to look at houses two or three times before deciding whether to make an offer, she said. Now, new listings are drawing multiple offers within a day or two of going on the market.
In recent months, Keller Williams Realtor DeDe Cunningham listed an
Oak Ridge house as “Coming Soon,” meaning it would be available for showing to potential buyers in a week or two. Based upon an exterior photograph that accompanied the “Coming Soon” advisory and photos from 14 years earlier when the house sold before, a buyer offered $30,000 over list price and a $50,000 due diligence fee, according to Cunningham. The house was listed for more than $400,000. The seller received – and accepted – the offer.
Buyers “are starting at asking price and going up,” Cunningham said. “Rarely do I see offers below asking price.”
Historically low interest rates have spurred demand for housing while the COVID-19 pandemic has weighed on supply over the past year and a half.
Early in the outbreak, health-related lockdowns kept people at home, spurring some to spend on home improvements that have allowed them to stay put instead of selling their houses, Realtors said. Rising prices and delayed deliveries of building materials have slowed construction of new houses.
“The fact that homes are selling for higher than asking price reflects supply and demand,” Cunningham confirmed.
For homeowners who decide to sell, many are getting multiple offers that initially exceed asking prices. Many buyers are also offering due diligence fees totaling thousands of dollars to entice sellers to accept their offers.
Once a buyer and seller have entered into a contract, the fees are not refundable even if the sale of the house doesn’t go through, according to Realtors. That can put buyers in a tough spot.
If an appraisal values a house for less than a buyer has agreed to pay, the seller needs to reduce the price or the buyer needs to make up the difference out of his own pocket – or risk losing the due diligence fee.
But for some buyers, offering more than asking price along with due diligence fees isn’t enough, agents said.
“Cash offers are king, especially for homes without appraisals,” said Gil Vaughan, a Keller Williams agent. Forgoing appraisals can speed the closing process, typically favored by buyers and sellers, he said.
Even so, all cash is no guarantee of success. Vaughan said he’s working with clients offering to pay cash for a house in the $800,000 range, and so far they’ve not found what they’re looking for.
Houses selling for $450,000 and less typically draw a half dozen or more offers, Vaughan noted.
“Good homes in the northwest area that have been updated and properly cared for are usually gone in three to seven days,” he said. “The majority of them are selling for more than asking price.”
Realtors said they believe the supply shortage will persist through the end of the year and ease gradually after that. In the past four to six weeks, Cunningham said she’s seen “little hints” that the supply crunch may be softening, such as the reduction of list prices for houses initially priced too high. In some cases, houses are going unsold for a few days longer than earlier this year.
“It is going to be a seller’s market for some time, but I think we are moving to a more reasonable seller’s market,” Cunningham said. “It is going to be a slow change.”
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