It's May and time for the second wave of the home buying season.
Wave 1, from end of March through April 30, featured a lot of "fresh meat" on the market listings which went under agreement, and sometimes back on the market, within a few days of being listed. This wave had many situations of multiple-offer competitions and buyers bidding over asking price for a property. There were also many situations where the deal fell apart after being accepted based upon the home inspection, "buyer jitters" or the buyer getting beaten up by their friends and families' opinion that they paid too much for such-and-such a house. There were also buyers that thought they could finance a home purchase and realized that the needed to save more or fix their credit before they could get a pre-approval that would get them to the closing table.
What's in store for Wave 2? My experience has been that in Wave 2 the home buyers are going to be a bit more seasoned - they know that they are going to need to have a very strong pre-approval letter and put more money down if they are going to win in a competitive situation. They are also going to have to be working with a buyer agent that can write a "winning" offer for them since offer price is important, but there are a lot of other factors that sellers consider when accepting an offer.
Buyers are also versed in the experience of going through a home inspection and finding out what it feels like to have your dream home "picked apart" by the home inspector. They are also know that they need to be able to decide quickly if they like something.
In Wave 1 we saw a lot of "first-time buyer" homes listed - in Wave 2 we will see more "trade-up" homes listed as well as "kiddie condos", investment properties such as condos and more multi-family properties. Sellers are going to be a bit "cocky" about what they ask for since they have seen the demand from Wave 1, but they will realize that they also have to be realistic in the pricing if they really want to sell - today's buyer is very aware of value and pricing and if it is priced too high, the property will sit until the price-change death spiral begins.
Wave 2 will also see tremendous challenges for mortgage companies as they try to keep up with the volume of closings from Wave 1 and the processing for Wave 2 sales all combined with a very robust refinancing market. It will be more important than ever to work with a local mortgage company or bank to make sure the deal goes through on time.
... and that is what my crystal ball (and years of experience) is telling me