Is it a good time to buy?
I hear this question several times a week, if not per day. My response is consistent, but the answer varies depending on who is asking the question.
There are general facts and statistics, but there’s no ‘one size fits all’ answer. Whether or not it’s a good time to buy (or sell) is more about the local market and the individual circumstances of the person doing the buying and/or selling.
If you’ve paused your home search or given up altogether because of the rise in mortgage rates, I’m happy to share some reports and statistics specific to our local market.
It’s important to keep in mind that even though prices were historically high and inventory historically low across the board over the past couple years, some areas experienced more drastic price increases and inventory issues. The Grand Strand being one of those areas. Now that interest rates are higher than the all-time lows of last year and the market has started to level out, we are still be in a high demand area. If someone needs to sell a house in a city/state where many residents are leaving to buy a house in a city/state where many people are going, they are going to be selling in a softer market and buying in a more competitive market. A lot of buyers have expressed the desire to wait until prices significantly drop. That might be a solid plan in some markets, but more affordable areas likely will stay in high demand. My advice is not to overextend, but to look at the entire big picture. If rent is $2000 per month and a house payment is $2000 per month, especially if there are no big job or lifestyle changes in the horizon, you might want to consider a home purchase. If you are locked into a sweet low interest rate and happy with your current home, you may decide it’s not your best time to buy.
After about 2 years of record breaking activity where multiple offers would be submitted on a listing the minute it hit the market, things are starting to shift. I had never witnessed such a difficult or more fiercely competitive time for buyers. There simply were not enough houses to satisfy the demand in our area, which priced many buyers out of the market. Even buyers who were approved for loans would miss out due to multiple offers. Some of those buyers would offer over asking price, waive appraisal and/or inspections, or offer concessions to the seller. Not ideal, even for an informed buyer. Now that rates have gone up, many buyers have expressed the opinion that it’s a terrible time to buy a house. For some, it is. For others, it’s not. That’s not me being vague. There’s just a lot to consider.
I like to sit down with my potential buyer clients and go over their specific real estate needs as well as pros and cons. There’s certainly less competition from other buyers right now, even in our high demand area. I’ve personally had buyers recently purchase homes for prices that reduced the amount they were paying monthly for housing. Many sellers lately have been more willing to consider not only negotiating purchase price, but giving buyer concessions toward repairs, buyer closing costs, and/or mortgage rate buy downs.
If you want to discuss the whole big picture, feel free to contact me, but here are a few things to consider:
- Even though home prices may not be as low as some buyers would like, they are leveling out.
2. Consumer confidence went down and has started to recover, but still many buyers are priced out of the market by higher rates.
3. Most sellers are aware of the market shift. That means many will negotiate if their house doesn’t get as much activity as expected or if it doesn’t sell as quickly as anticipated.
4. Price isn’t the only thing many sellers will negotiate. Some are willing to give concessions to buyers in the form of repairs, closing costs, and even mortgage rate buy-downs.
5. Competition increases as consumer confidence rises. Though consumer confidence seems to be on the rise, it’s still low. As confidence spreads, more buyers re-enter the buyer
pool which could impact how much (or little) sellers will bend on price, terms, concessions.
I wish I had a crystal ball, but since I don’t I will continue to stay up to date on the most current reports and statistics and give real estate advice based on what’s best for my client’s situation. I’m always happy to answer general questions or recommend mortgage or financial advisors, so don’t hesitate to reach out if I can help!