Buckle up, because the real estate market is officially on a thrill ride. Interest rates fell to record lows then rose faster than a teenager’s mood swings. But unlike those mood swings, this rollercoaster has real consequences for everyone involved in real estate. Whether you’re an agent navigating this crazy landscape or a potential buyer/refinancer trying to make the right move, understanding these changes is important.
The Interest Rate Seesaw: A Wild Ride for the Market
Interest rates haven’t come down as quickly as everyone expected, but we’re finally seeing some softening. At the moment, the downward movement is gradual, but in this volatile, crazed world, anything can happen to cause a dramatic move, up or down. We can only watch…
Buyers: Now or Never? The Million-Dollar Question
The rising interest rates cooled down the market compared to the frenzy of the past couple of years. Homes are staying on the market longer, and bidding wars are less common. But value have held, mostly because there aren’t enough homes on the market. That is gradually changing for a number of reasons.
The more common reasons –
~People are aging out of their homes. Their kids inherit and don’t want the property so it goes on the market. This is beginning to happen more than you realize as the number of homeowners in this category is growing quickly.
~People have to move. Whether it’s relocating for a job or just to get out of Dodge, homeowners are selling. Most don’t want to be landlords, so they don’t retain the property as a rental. Also, they have probably built up a lot of equity and would rather have that for the purchase of a new home elsewhere.
~There will always be growing families, marriages, divorces, and various changes in circumstances.
Buying Now vs Later: Weighing the pros and cons.
If you buy now, there is definitely less competition which can give you more negotiating power. If possible, accept an interest rate that will require the fewest fees. This way, when rates drop, you won’t have spent a lot of money on fees for your purchase loan. Also, prices don’t show signs of declining so waiting for a “deal” probably won’t happen.
You can wait until rates come down further, which will enable you to qualify for more, but at that point, there will be more competition in the market.
Sellers: Strategic Pricing
Sellers need to be savvy in this market. Overpricing your home could leave it languishing on the market, while underpricing could mean leaving money on the table.
Tip for sellers:
Work closely with your real estate agent to analyze recent comparable sales in your area. Overpricing isn’t generally a good strategy in today’s market, but your real estate agent is your best guide.
Refinancing: Is That Even a Thing Right Now?
The answer is an unequivocal yes. In some circumstances, you’re probably not going to refinance to lower your rate, but if you have a lot of high-interest consumer debt, such as credit cards, it might make sense to pay them off. You may be able to do that with an equity line, though, so homeowners should check all options available. There are many new types of equity lines available right now, and with sufficient equity, you don’t even have to prove your income.
Conclusion:
Whether you buy now or wait depends on your personal circumstances and goals.
If you’re looking for a home, don’t try to time the market. If you’re looking for investment property, it will cost you more than it would have two years ago, but the income will also be higher. It’s all about the numbers when it comes to investment property.
Whether you’re buying, selling or refinancing don’t go it alone. Partner with professionals to make informed decisions in this fast-moving market. You’ll save money in the long run.
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