Koffee with Kelly – Real Estate Tips for Buyers. Are you thinking about buying a new home? Now may be a perfect time! The past few years have been challenging for home buyers due to various factors, including low-interest rates and the pandemic. Where is the market heading? Check out this article!

Are you thinking about buying a new home? Now may be a perfect time! The past few years have been difficult for buyers as the market was flooded with buyers because of low interest rates, housing needs have changed due to the pandemic, and new homes have been lacking. The result was lots of competition, and almost every house that sold received multiple offers, putting buyers in a position where they had to offer a premium over the asking price to secure a place to live. In addition, although interest rates were at all-time lows, home prices were skyrocketing annually by 20% year over year.

So what is happening now? The housing market is “adjusting.” It adjusts to the increase in interest rates, which brings some advantages to buyers, making it an excellent time to buy. Here are three reasons:

Home Availability: More Time to Decide:

Homes stay on the market longer than 24 hours. This gives you more time to go out and look at all the homes on the market in your specific target neighborhood and at least a day or two to decide if you want to make an offer. You no longer need to look at a home the first day it comes on the market and determine within hours if you will make an offer.

Contingencies: More Flexibility for Buyers:

For the past few years, many buyers waived all contingencies when there were multiple competitive offers. Recently, however, we have seen more and more offers with home inspections, appraisal contingencies, financing contingencies, and even a few home sale contingencies. This is good news and will make you more comfortable with home-buying.

Interest Rates: Still Historically Low:

Although they are not at 3% like they have been for a couple of years, they are still historically low. You are also more likely to be able to offer a list price versus a price significantly above. Sometimes I hear people say, “You know, I think I’m just going to keep renting for another year and wait until prices start to come down, or maybe interest rates will improve.” This idea makes me pause, as there is no indication that prices are coming down. And do you know what the interest rate is on a rental? It’s 100%. Why? Because you are not building any equity. You are essentially paying someone else’s mortgage, and they are gaining equity in the home. So why do that when you could have the opportunity to buy your own home and start to build equity? And, of course, you can refinance when interest rates come down in a couple of years.

Fewer Bidding Wars: Less Competition

One more thought: With the current “adjusting” housing market, we see fewer multiple-offer situations (a.k.a. bidding wars.) This helps you be a buyer because although your “buying power” may be less due to higher interest rates, there is no longer a demand to bid 10+% above the list price. This allows you to target better what homes you should be looking at, as you can now offer a price much closer to asking.

Buying a New Home Conclusion:

So yes, it is a great time to be a buyer. Please contact me, Kelly Ettrich, with your real estate questions, and we can discuss the best strategy for getting you into a new home this year!

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If you want to buy or sell a home, contact Kelly Ettrich to help you on your real estate journey.