Interest rates. Interest rates. Interest rates.
Interest rates are on everyone’s minds and are keeping both buyers and sellers on the edge of their seats.
People became accustomed to interest rates in the 5’s which have continued to rise and they are now at their highest rate since 2008. With future increases predicted, it appears that it’s not going to be an easy fight to battle inflation. As consumers, we now must get accustomed to rates in the 6’s as we deal with the ebb and flow of the current market situation.
Traffic at open houses still seems good, but the pool of buyers will likely diminish as the hesitance of the volatile interest rate situation heightens. Anecdotally, however, we are seeing an increase in FHA buyers with rates that are still manageable for many buyers.
Interestingly, inventory hasn’t risen as exponentially as the rates. Because many homeowners have great interest rates in their current residences, they are not listing their homes to upsize or downsize unless it’s a necessity. Many would-be sellers are choosing to stay put and enjoy their current mortgage payment.
A Market Shift?
The market is changing. I wouldn’t say it’s a buyer’s market but it is shifting in that direction. Sellers need to be more patient, but they aren’t even sure what a normal market looks like. In the past, it wasn’t unusual for a house to sit 30-45 days without any sense of panic. The pandemic flurry changed the way that both buyers and sellers perceive the market and these conceptions continue to jangle the nerves of sellers.
A More Normal Market Emerges
There are benefits of a more normal market. Contingencies are back for buyers who now have more time to consider their options. Buyers can get inspections and feel more secure and measured in their purchase choices.
Setting a correct price is more vital than ever. And marketing a home properly with staging, and professional photos is paramount. Forty percent of homes this month had a price reduction, so it’s time to consider more carefully the valuation you choose to attract and appeal to the most buyers.
What Lies Ahead?
Currently, we are in a somewhat normal real estate market. Will that stay the same? Tune in to the program for more predictions regarding the 2023 market and how to best meet the challenges and opportunities it presents.