Ch Ch Ch Changes!
I went to a party this weekend; a delightful little backyard wedding reception. There were lots of friends I hadn't seen in a while and quite a few past clients. Over and over again people asked me about real estate, the market, interest rates and...dun dun dun...an impending recession. I love how hot of a topic real estate is in this town, it is always great fodder for conversation and happens to be my favorite topic (besides- what kind of dog is that??).
If you haven't been paying attention, things have changed. Interest rates have risen, which has resulted in a lot of buyers bowing out of an previously tough marketplace. They figure if they were already losing out on homes due to multiple offer situations, then they now have no chance with high interest rates. At the same time, sellers have realized they might have missed the boat, so there have been tons of new listings lately trying to cash in on a hot market before it's "too late". So when you have more homes, and fewer buyers, what you end up with is a more normalized market- the scale starts tipping in the favor of the buyer. I'm having so much fun with my buyers lately. They have more homes to choose from and I am able to negotiate far better deals for them since there is just less competition overall.
Your POV: but Annie! I read that prices are dropping!
When a listing agent is using prices based on a time when interest rates were at 3% and expecting buyers to jump, they are sorely mistaken. Many agents aren't quite keeping up with the times and accounting for higher interest rates. So their homes sit on the market and we are seeing price decreases left and right. But is this rates plummeting, or the market adjusting to the new interest rates?
You: Is your home worth less now then when you bought it?
Me: A) Probably not. B) Who cares? As long as you keep it, then it doesn't matter what it's worth. In the past 30 years homes have done nothing but increase in value over time, so just remember that real estate is a long term endeavor. Hold steady and the wealth will follow!