Clearly, the housing market is slowing due to skyrocketing interest rates, rising home prices, and inflation. But taking a negative path won’t help homebuyers weather this changing market storm. So let’s take a look at the conversations homebuyers are having to get their dream home in this market.
Marry home and date rate.
Overwhelming demand has finally calmed down and inventories are rising from record lows. Realtor.com® reports a 27% increase in nationwide inventory of active listings for September 2022 over last year. This is the largest margin since the data were recorded. As a result, we are able to partner with homebuyers to find great homes with less competition.
Once the buyer has decided on a house, it’s time to discuss the elephant in the room: the mortgage interest rate. Interest rates have surged in the short term, but have risen from historic lows of around 3% for traditional mortgages. So even if the buyer were to lock in rates now, they would still be lower than his 8%-plus rates from the 1980s to his 2000s.
Many first-time buyers don’t see affordable options. This is a confusing time, but buyers have more opportunities and some competitors are choosing to wait. As a result, clients have more time and negotiations with sellers when making offers. With less competition, the bidding war isn’t driving prices above the asking price as it has been in the past year. With interest rate dynamics largely unknown, it may be prudent to urge buyers to act now if suitable housing emerges.
What does the future hold?
While we don’t have a crystal ball to predict what the future holds for the economy, historically residential property values have endured previous recessions. The current market is unique because it has accumulated . In fact, negative home equity is almost zero. So even if a recession hits and home prices drop, it won’t wipe out property values. Additionally, mortgage rates tend to fall during recessions, making opportunities available to refinance loans that are now locked at higher interest rates.
click here A quick guide through these three important conversations. Now is the time to reach out to past clients and your sphere of influence. Tell them why now is the perfect time to buy a home with you!
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