With economic fears looming over homebuyers’ heads, real estate deals are falling out of contract due to uncertainty in the markets.
SAN DIEGO, CA, USA, May 23, 2023/EINPresswire.com/ — In 2023, the real estate market witnessed a noticeable shift in the behavior of professional homebuyers, with fewer individuals making offers to sellers. Fear has bled from the commercial real estate market into the residential side. There’s a prevailing sense of fear and uncertainty that has gripped the market, causing homebuyers to withdraw offers and keep their money on the sidelines.
This hesitancy among buyers has had a tangible impact on sellers. Annually, home sales were down 23% from a year ago, reflecting the cautious approach adopted by prospective buyers. Despite the prevailing market conditions, it is essential to examine the underlying factors driving this trend and consider the potential implications for both buyers and sellers alike.
This unfortunate situation is leaving sellers stranded as more deals fall out of contract. Homebuyers are leveraging contingencies within their agreements, allowing them to back out at the last minute for nearly any reason. Sellers expecting a large payday at the closing table are left devastated as buyers back out at the final minute.
Whether sellers receive a cash offer or mortgage offer, buyers are inserting contingencies to protect themselves from getting into a deal that they could lose money on. While there are differences between cash and mortgage offers, buyers can back out of either. A real estate transaction isn’t over until it’s over.
Many home sellers are rushing to sell their properties during the summer months. The hope is that the summer selling season will supersede existing homebuyer fears. However, the market’s volatility, coupled with unpredictable economic conditions, has created a climate of caution and apprehension among these buyers, forcing them to reevaluate their investment decisions.
Fortunately for some sellers, not all companies that buy houses professionally are slowing down. Expensive real estate markets, such as California, experienced an initial price softening when interest rates started to increase. Oceanside homebuyer, SD House Guys, continues to take advantage of slower times and purchase more homes to flip.
Alex of SD House Guys explained his company’s current position, stating “The markets in San Diego County slowed for a few months but picked right back up shortly after that. There are many buyers that are pulling out now, which I get. Oceanside is a long-term investment for our team, which is why we continue to do business even with looming economic times ahead.”
While the future of real estate is uncertain, short-term buyers and sellers are second-guessing their every move. Overall, more real estate transactions are likely to fall out of contract as buyers pull out or cannot perform. Sellers that absolutely need to sell now will be stuck holding their bags or selling for a discount.
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