Balance of Power Shifting

For many years, buyers in the Spokane region have had their way, until the recent surge in prices and lack of inventory made purchasing quite difficult.   A clogged supply chain now has left many of them wanting.  To add insult to injury, rising interest rates have put buyers on their heels with no end in sight to that dilemma.  That fact has brought the housing market to a screeching halt in some sectors of the local market. 

For decades, spoiled buyers have been able to come to the table with meager amounts of earnest money and with virtually any reasonable offer in order to come away with a purchase contract in hand.  As the market shifted, buyers were slow to admit that the balance of power had shifted to sellers.  But now it seems, after just a short stint on top, sellers are the ones who are reluctantly adjusting to the fact that their turn in power might be short lived.

Recent statistics reveal that the rate of price reductions documented by the Spokane Association of Realtors® is rapidly rising, evidence that anxious sellers are making more adjustments.  The old buzz words found dangling from yard signs, “price reduced” or “new lower price”, have been replaced with the newer trendy synonym, “Price Improvement”.  But no matter how some innovative brokers try to mask the change, it seems as if the balance of power is shifting back towards buyers. 

Driving that change are motivated sellers, who really need to sell. Those anxious sellers constantly monitor their market activity and aggressively make concessions in order to attract the few buyers left standing.  That shift in attitude could stimulate the market, but the real question is, will average buyers be able to stomach the huge jump in monthly payments due to higher interest rates? Are we at a standoff?  

How long will that standoff last before something gives and prices drop and a new market correction gets things moving again?  Even though it feels like the roller coaster has slowed to almost a standstill at the top of the curve, getting ready to accelerate downward, will there be enough momentum to carry it forward even though it will be in a downward trajectory?   No one really knows that answer yet, but it is inevitable that a correction is due and that the balance of power is shifting.