Welcome to Fall, and wow it’s beautiful so far! Here is our boots-on-the-ground perspective on the current real estate market. We are showing property, writing offers, and helping buyers and sellers to be successful every day, so we have our finger on the pulse of what’s actually happening.
We think it’s potentially a great time to buy a house right now for many buyers, and also too many people may be missing understanding the opportunity.
We all know that interest rates are ‘high’? We’ve been told that by a million news articles and tv segments, so it must be true! But are they ‘high’? Historical average on mortgage rates is about 8%, so unless it goes up a lot more (and few experts think it will), lending for mortgages is still a relatively good deal. Keep it in perspective. We will probably not see those ultra-low rates again any time soon, if ever. Many buyers will be better off getting into a home and mortgage now, and refinancing when rates come down enough for that to make sense. Consult your mortgage professional.
It’s great opportunity in the market for buyers, with easier access to homes in many ways. There are fewer bidding wars, more asking-price or below asking-price offers being accepted. Buyers are generally able to get a home inspection contingency. And sometimes able to get the seller to contribute to their closing costs.
When interest rates were rock bottom, our buyers had a very frustrating market that they were forced to compete in. We lived it daily, struggling to get them homes. We saw some huge bidding wars, waived inspections, and buyers having to come with cash to pay sellers if the house didn’t appraise for the contract price.
We hope that we can help more buyers in the coming months, as we think the bidding war days will be back when rates start coming down. They are predicted to next year.
Sellers have had quite a run in recent years with it being an extreme seller’s market. We had unprecedented price appreciation and outsized bidding wars. Those days are gone for now, and for who knows how long.
However, it’s still more of a seller’s market than a buyer’s one. We have record low inventory, and inventory was low already before this. Now it’s really, really low. So in many cases you don’t have a lot of competition as a seller.
Despite this, we are seeing that buyers are more fickle and expect houses to be more updated, and move-in ready. Houses that are very attractive and well-presented for market are selling. Those that aren’t, may have much longer market time, as buyers snap up the best houses. Our advice to sellers is to get your house in as good of shape for showings as possible, since we don’t have as much wiggle room to get away with buyers overlooking the flaws as we used to.
What about price reductions? Are houses getting cheaper? Is the bottom falling out of the market? No, not at all. The price reductions are due to houses being priced relative to houses that sold in Spring when the market was more inflated. We need to be a little more conservative on price, to get the price right. That is more ‘normal’ and ‘typical’ vs the very extreme market that we’ve seen.
Also notable: many entry-level houses are still selling quickly, sometimes in multiple offers. Houses that appeal to mover-uppers are often taking longer as there are fewer buyers who want to trade their lower rate for higher one. Regardless, your house should sell if it’s priced appropriately and shows well. Though, it may not be in a day and over asking price these days.
Note: this page provides our observations and perspective of the real estate market, and is intended for general information only. Nothing here should be construed as mortgage, tax or financial planning advice. Consult your professionals in those areas for advice on the best strategy for you.