Prices Up, Sales Down…That is not a recipe for an ideal real estate market. Add the increasing interest rates and, once again, I have to advise that if you are looking to buy or sell a home, now is the time to act.
First, let’s look at the market numbers from September that were just released by ARMLS. As you see, for the 4th month in a row the statistics, on the surface, look good for sellers. However, if we dig deeper we see that while pricing continues to rise (up 7.8%), new contracts are down (9.2%). Buyers are simply not paying the higher prices.
Last month, listings that sold were down considerably (14.4%). A slow in sales at this time of year is somewhat normal. School is back in session, the holidays are looming, the weather is nice so after a long, hot summer. People tend to want to get out and enjoy it rather than shop for a home. Totally understandable. September showed a drop that was over 2 times larger than last year at this time. That is significant and a red flag that prices will have to follow, soon. They are already showing a 1.5% shift.
Add to the “Market Adjustments” a rising interest rate, and projections of as many as 3 more increases this year, and we have a market that demands action (in my opinion) right now.
Sellers. Don’t let an agent deliver you false hope when it comes to pricing your home. You’ll see trends of pricing going up and that can inspire you to price higher trying to grab more, more, more. You stand the chance of chasing a falling market. Be sure that you are seeing the trends in your area, but also the market forecast.
Also, get your home ready to sell. Make minor repairs, don’t make it “the buyers problem”. Refresh the home with paint, maybe even carpet, fixtures, simple landscaping. Pretty homes sell faster.
Buyers. The simple thought would be, “Prices are dropping? I’ll wait and pay less!” Seems logical right? It would be if the interest rates weren’t rising. Keep in mind that a higher interest rate means your new loan is more expensive. This year the rates have risen about three quarters of a percent already, how does that impact you?
You likely have a budget for your monthly mortgage payment, most do. Well, a simple .25-.5% rate hike will mean that you will either have to come out of pocket with a higher down payment, or buy less home in order to stay in your budget. How much less? A .5% rate hike could be the equivalent to as much as $15,000 less home (or more out of pocket up front).
Do you give up a pool, garage space, home office, upgraded kitchen?
The point is, don’t wait. The market has seemingly reached the peak and is “adjusting” right now. In a matter of months your home will sell for less, and the home you want to buy will cost you more.
Call me today to take a look at your individual situation and let’s get started.
(602) 818-6065 – Kevin@GiantAgent.com