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 need changes due to the pandemic, lack of new homes being built, etc. The result was lots of competition, and almost every home 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 is adjusting to the increase in interest rates which is bringing some advantages to buyers – making it an excellent time to buy. Here are three reasons:

Reason number one – home availability: Homes stay on the market longer than 24 hours. This gives you more time to go out and look at all of 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’re going to make an offer.

Reason number two – contingencies: 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.

Reason number three – interest rates: Although interest rates 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.

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.

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!