Both condo and single-family housing inventory stalls briefly before reaching new highs this past week. We noticed. We noticed the last few weeks pending sales increased as interest rates were declining.
Housing Inventory Stalls Briefly Before Reaching New Highs
Since we last posted about rates going under 5%, they have since gone back up to around 5.25% Sure enough, pending sales dropped a little and inventory increased again. Is this a direct correlation to interest rates? We cannot say for sure, but it is interesting.
We do know that interest rates play a part in affordability. Affordability affects not only what a buyer can pay for a home, but also their emotional outlook on finances in general. We did see some contracts from families trying to get into a certain school zone and that could have played a part as well.
The general consensus is mortgage rates will rise in the short term, although the long-term effect is less clear. Buyers would be better off purchasing sooner than later if possible. Even if you don’t like today’s rate, you might like tomorrows worse. We have a saying “You marry the house and date the rate.”
Marry the House and Date the Rate
Find the home that matches your needs, and you can afford today. Later on, if and when rates come down you can refinance to a lower rate.
Listings that are priced correctly and marketed well are seeing offers. Gone are the days where we see 50 offers on every property. We still have a good market with buyers motivated to buy. Buyers today cannot afford as much as they could 6 months ago. The good news for buyers is the massive price increases have stopped. We are not seeing rapid rise in prices. In fact, home prices have leveled off or declined slightly. It is hard to calculate because this time of year usually brings a slight dip due to seasonality.
The US economy is holding up well. Bear in mind, there are still trillions of dollars floating around out there, so a few interest rate hikes wasn’t going to kill the economy. Our government just signed a deal for even more money flowing into the economy, so when the Fed pulls back it’s treasury security buybacks it may not hurt as much.
Experience Matters
I just saw a stat from the National Association of Realtors that said 91% of Realtors have not sold a home when interest rates were over 4% and days on market is over 45 days. So many agents in the business today just joined in the last few years and have no experience working in a normal market. It’s no surprise that so many agents are leaving the business. Last year you couldn’t write offers fast enough.
Today it’s back to knowledge, experience, and marketing muscle. I predict thousands of new agents will get licensed because they don’t know any better. They don’t realize how many agents are leaving because real estate is hard. This business always has room for dedicated people who are willing to work hard and learn. Most agents get into the business for the flexibility, which means the ability to take off.
When you are interviewing agents to buy or sell, make sure they are dedicated to staying in this business, and have the experience working through market shifts. If not, you could end up paying for their inexperience. Their learning becomes your experience.
There is an old saying “What happens when the guy with experience meets the guy with money? The answer is the guy with experience ends up with the money and the guy with the money ends up with the experience.”
The commission you pay is for your agent’s years of experience. Saving money with an inexperienced agent could leave you with the experience and out much more money than what you hoped to save.
Always call the Ellis Team at Keller Williams Realty 239-489-4042. Visit www.LeeCountyOnline.com to search the MLS and www.SWFLhomevalues.com to get your home’s current value.
Good luck and happy selling!