We are 11 months into 2015, and with the year winding down and the holidays upon us, the market is understandably a bit slow. One sure sign of a slowing market is the fact that sellers are accepting contingent offers again. Remember those? That’s when you find the home of your dreams, make an offer, but you have to sell your existing house first. It’s a great concept since the alternative involves some tricky timing or an interim move.
In the hot hot hot market of 2004 and 2005, sellers were enjoying offers with no contingencies (“we will take the house as-is, no inspections, no loan contingency, no appraisal contingency”) so a house-to-sell contingency didn’t have a chance. But back then, we still had the crazy loan market, where buying a house without selling your house was possible; the lenders just made it work somehow (something that would seem careless and irresponsible later, but at the time it simplified life for the move-up buyers). And then came the slow years, and in 2009 and 2010, contingent offers were abundant.
This strikes me as ironic. When a seller can’t sell their house easily, they are willing to take a contingent offer–relying on yet another house to sell in a tough market. But when the contingent sale would be a slam/dunk, the seller is not likely to consider it. Of course, that’s often because the seller has better, cleaner offers to consider. I had a listing in September (61 Bolla Ave in Alamo) that received six offers. One was contingent and was immediately placed in the “other” pile. My sellers simply did not want to deal with the complication if they didn’t need to.
But most of the homes on the market today are not receiving multiple offers, and a buyer can certainly write a contingent offer with some confidence that it will be considered. In fact, one agent told me yesterday that she has a continent sale currently pending that has four contingent sales behind it. That’s a lot of dominos, but it’s going smoothly and all the homes in the transaction chain have removed all contingencies.
Today, as I captured the inventory numbers, I glanced at the current contingent sales and found 15 of them. Price ranges from $500,000 to $2.6 million, five of them are in Danville/Blackhawk, three are in San Ramon, two in Pleasanton, and one each in Lafayette, Alamo, Pleasant Hill, Dublin, and Diablo.
Inventory numbers for today (and a few pulse points over the year):