High-volume home sellers are in a bit of a pickle in today’s market thanks to rapidly rising mortgage rates last year.
“We’re just trying to move inventory quickly,” said Lee Kearney, a Tampa, Florida-based real estate investor who has an inventory of between 15 and 20 homes for sale at any given time. “If it’s not moving, change the pricing so it does move. These are market-based decisions.”
Kearney’s simple strategy for surviving as a high-volume seller in an environment where demand has dried up: listen to the market and do what it says.
“As a seller if something is sitting out there a couple weeks and it’s not selling, the price is too high,” said Kearney, who has been investing through multiple real estate cycles and believes housing will not be rebounding substantially in the near term. “There’s no good news around the corner. If you believe that statement, then the action item is to lower the price.”
Although there have been some recent positive signs in the housing and jobs markets, those signs point to stubbornly high inflation and a corresponding stubbornness on the part of the Federal Reserve to continue raising interest rates over the longer term to fight inflation. A longer-term fight against inflation lowers the likelihood of sustainable good news in the housing market and raises the risk of a coming recession.
iBuyers pull back in this housing market
Although he is being much more selective in his acquisitions, Kearney has not stopped acquiring properties altogether, a strategy that some larger institutional investors adopted in certain Tampa neighborhoods in late 2022. Those neighborhoods are now feeling the most pain in terms of value loss, according to Kearney.
“The $500,000 house is now $450,000. It’s an interest rate calculation,” he said. “Especially cookie cutter neighborhoods where