Sunday, September 18, 2022

Slump or Slowdown...




Slump or Slowdown… What's really going on in the housing market?


When it comes to the housing market, there are many ‘predictions’ of what’s happening. First the obvious; higher interest rates has led to fewer qualified buyers causing the frenzy of the pandemic-induced race for space to be in our rear-view mirror. But has it stopped all sales?  That doesn’t appear to be the case. It’s still a busy, but not frantic market. Let’s just say we appear to be moving at a more normal pace with homes taking 25-30 days to sell instead of 3 or 4.

While sellers were used to having a dozen offers to choose from, now they are lucky if two or three buyers show interest in their home. This change has led to buyers feeling a little more in control of the situation and has caused them to expect concessions in the form of credits and repairs – how quickly the tide has turned!  Not surprising since they were at the mercy of sellers for over a decade. So while you may not see prices coming down significantly in your neighborhood, behind the scenes there may be more negotiating going on than you know.

And don’t get me wrong, prices are coming down in the form of price reductions but that’s because hopeful sellers were pricing their homes too high to begin with – 48% of homes that went into contract in our region last month had made a price adjustment.

Since the market shifted in April, prices have adjusted - in some areas more than others – but prices had gone up so significantly over the past two years that sellers won’t be under-water on their values anytime soon. Most sellers are sitting on a fair amount of equity that they’ve built up over the past decade. With the rise in interest rates, they won’t be tempted to refinance and pull out that ‘free money’.  Thank goodness, since that’s what contributed to our last collapse. In some areas, home prices are still on the rise but the rising cost of living and increasing interest rates are starting to have an effect. With one more increase in mortgage interest rates expected in 2022, it’s anyone’s guess what that will do to our buyer pool, much less in 2023??






While the rates are still significantly lower than they have historically been, the price of a home is ten times what it was in 1982.  Rates are probably the most significant change in our market today.

Increased interest rates have a much more significant effect on a buyer’s monthly payment than a reduction in the home’s price of say $20,000.  This is why if someone is considering buying a home, it’s wise to do it while rates are still relatively low and not wait.  Many buyers who thought that the market would slow down and prices would come down have been priced out of the market by the increase in the cost of money.

For sellers who are considering making a move, the ‘anything goes’ market is now in the history books.  We’re back to the market of pricing it right and baking cookies to give that “there’s no place like home” feel.  This type of market is one that I enjoy much more than the frenzy.  It’s fair on both sides of the aisle. If you’re thinking of buying or selling, or you know someone who is, I would love to be of assistance in the process.


Be sure to watch for 
Coffee with Carol” a daily livestream on Facebook that will look at what’s happening in our local real estate market, keeping you up on the trends and giving you an opportunity to ask the questions that you want answers to.  Send me a friend request and I’ll see you soon!



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