Buyer Frenzy Cooled Off?
Updated: Dec 7, 2021
Finding a good real estate deal right now is like finding a needle in a haystack. Can it be done? Sure. But will it be worth it? Absolutely.
If you have been following along in the real estate market, you may have noticed a trend toward a more relaxed market. Fewer buyers making offers on homes, fewer properties selling in the first 2 hours on the market, and more homes having price drops. To this, I say, "Congratulations, you have been paying attention". The market indeed saw a slight turn of events for a small window of time. But that window closed and the market is still sizzling hot!
If you missed that brief window of time, it's probably because you were getting your kids ready for the upcoming school year, or maybe you saw it happen and thought, sweet! Let's wait this out a bit. Well, you might have missed the slowdown. Kids are in school, and the buyers are back to looking.
Besides all the weirdness in the world, it was weird to watch my phone going from buzzing every 20 minutes to no buzzes at all. For the last two weeks, real estate wasn't a focus for many clients. I have not been in this position since before the pandemic when it was "easy" to buy a home. I forgot what it was like not to make offers every day because if my clients didn't make five offers, they wouldn't get any homes. So, for an entire day, I stared at my phone, wondering what was happening.
I wasn't the only one who felt it, though. All over social media agents talked about the market slowing down and that buyers were able to breathe finally. Well, a lot has happened in the last two weeks...
This "buyers can breathe finally" attitude is very house-specific and isn't happening broadly. With buyers in multiple markets, I can tell you that this slow down was short-lived, and buyers are back more than ever. Buyers express different concerns about getting back in the market, and I think the most significant driver is the fear of higher interest rates. Higher interest rates are and should be a big fear for buyers.
If interest rates go up, that does not mean the housing prices go down. Higher interest rates mean buyers are paying a lot more per month for the same home they could have gotten just a few months ago. Even if home prices come down $50,000, but interest rates increase, you will be paying more for that home than you would have with a lower interest rate.
If you are afraid of buying at the height of the market, don't be because you will still be paying less than the person with a higher interest rate. We also have no idea how high interest rates might go. The Fed is still playing with formulas and future outlooks. But right now, we know where interest rates are, and we also know they won't be this low forever.
Traditionally, a regular winter market is a slow season, but nothing has been traditional since the pandemic took over our lives. I think this winter season, we will still see many buyers in the market, more sellers wanting to capitalize, and multiple offers on homes. I wish I could tell you there was an end in sight.. but I just don't see it. The best thing to do is find yourself an agent that knows the areas you're interested in and listen to what they tell you. I promise your agents don't like this market either, but they will give you the best advice they can to make your offer and life the easiest it can be.
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