Tumbling stocks, rising interest rates, increasing credit card balances, inflation continuing its upward trajectory … what does this all mean for your Real Estate decisions today?
Unless you have been living on a very remote island or under a rock – you have heard that the Real estate market post the Covid-19 pandemic (…which of-course still shows no sign of really moving on but that is a topic for another discussion) has been hot, hot, hot! What does this translate to for most buyers and sellers?
Perhaps due to the ability for many employees to work from home, at least part of the time, the need for maximum flexibility and shifting priorities, the demand for (larger) homes has been skyrocketing while the lack of supply (an issue that has plagued us for years) is trending towards the extremely low mark! Covid helped us see a lot of the inside of our homes and highlighted all that we did not have in them. If you lived in the city, you also needed a home in the country, if you were in the suburbs already you wanted a bigger or better home. If you were renting you needed to buy a place to call home. Home improvement projects were a must for most – making contractors and service providers so very hard to find!
If you are lucky to be a seller with a place to sell in a nice location and do not need to buy any real estate – congratulations, you are in exactly the right place at the right time! Give me a call and we can sell your place quickly … and for more than you were likely expecting.
If you are a seller and need to buy and sell at the same time – this is a little trickier - however, there are many options to help ease the situation for you, particularly in this sellers’ market. For example, to buy more time you could sell now with a lease back clause or a use and occupancy arrangement – till you are ready to close on the other place. If you have other specific needs, let’s discuss, as a seller you should be in a good place to have things work out favorably.
Finally, if you are a buyer and have been desperately looking to buy a place these past few months or maybe even this past year, I feel your pain. I know you have been on quite the ride. Multiple offers in double digits have become commonplace. I agree, the listing price doesn’t mean that much anymore – just a springboard to leap up from. As a buyer with a mortgage, you have also watched your buying power steadily erode with rising interest rates. However, buying, like life, is all about perspective. Here are some things to keep in mind and stay positive. Most all buyers who hang in there, will find the right place eventually. You cannot really go wrong, as the fundamentals of the housing market are still very good. Demand is still much higher than supply, so even if you end up in a home that is not ideal – you can get the right one in a few years while continuing to build equity until then. Even though mortgage interest rates are higher than the past couple of years – they are still in reasonable territory when you look at rates historically. (...Freddie Mac average 30 yr. mortgage rates since 1971 is 7.8% )
One thing I have learned in Real Estate is that is only a matter of time for things to begin to shift again. Already we are seeing the start of a shift. The market is finally beginning to calm itself down. Decreasing affordability, higher interest rates and rising inflation means that only the serious buyers are left behind. No this does not mean that prices are coming down any time soon – the fundamentals of our market are still strong - it just means that competition is decreasing. So instead of multiple offers you are only dealing with a few. Those that stay the course will eventually succeed. In other good news, inventory is increasing again. June is the month that we often see the most homes come on the market – so hang in there!
Final word goes out to all of you out there that are sitting in homes much larger than you need and have been contemplating listing. Don’t hesitate to do so. This is perhaps the best time in recent history to list a home. Even though it can feel daunting at first, there are many ways I can help you to make it easy and as pain free as possible. Plus, many eager buyers and young families will thank you!
As always, I would love to hear from you. Don’t hesitate to reach out with your real estate questions … or just to catch up!
Best wishes,
Lotika