January 2024 Market Update

Happy New Year!

We are proud to announce the launch of The Erin Oldham Team consisting of Erin Oldham, Rhonda Cashell, Mary Roy, Katie Hatch, Miranda Harvey, and Ashley Kellogg as our NH referral agent. We have been planning for 2024 for the last six months and are excited the time is now.

Speaking of, things have shifted in the real estate world as well. Here is what we are seeing and hearing now. I think there will be additional shifts as we move towards spring so we will keep you updated.

Market Insights from The Erin Oldham Team

• Easing Interest Rates. The feds have announced they will begin to bring the federal rate down in 2024. That doesn't mean it will happen right away but the mortgage market has already responded by decreasing to around 6.5% from a high of 8%. This translates into a savings of $600 less per mo or $7,200 less per year for a $600,000 house from just a couple months ago. 
• Pent Up Demand. Portland, Maine has been identified as one of the top 10 areas with pent up demand. We are feeling this as well as we continue to get people moving here from outside of Maine. The easier winters are also playing a part in this as well. Portland continues to be very desirable and although the prices seem high, they aren’t as high as other highly desirable markets. We also expect that some sellers are tired of waiting for the right time and might just jump in this year to buy and sell. We know of a bunch of people who have houses that they are ready to list (we have 12 on our team alone!). I think the name of the game will be matchmaking this year - with people that need a home with people that want to sell. We will keep you up-to-date on off-market listings and opportunities we know about.
• Slow Start Leading into a Robust Spring Market. We anticipate that people will start dipping their toes in the market in the new year. Homes will start to be listed in late January/early February and even more in March/April. By March, the competition will get intense and by April/May, we will enter fierce-competition land. It can be intimidating but we work to make it do-able, and even enjoyable, and each year we come out of it with happy clients!

Strategy of the Month: The Escalation Addendum

No one wants to over-pay in this market. And, that is why we break out the “escalation addendum”. This allows a buyer to essentially say the following: “I would like to pay X but I am willing to pay Y, at an increment of Z over the price of another offer.”

Sometimes buyers hesitate because they are “showing their hand”, or their top number. It is important to note that the listing agent can only employ the escalation addendum if they show you another bona fide offer with a price above yours. And, they can only use offers to escalate your offer that are NOT contingent upon a second house sale.

We definitely want to consider the integrity of the listing agent when we use this strategy. I would use the escalation addendum with about 95% of agents but there are 5% of agents where I would hesitate and really consider the situation before I use it. 

Because you only get one chance in real estate to put your best foot forward (they only come back to one offer to negotiate), the escalation addendum can be critical in giving you a chance to “win” the house.

The Real Deal: The December 2023 Market