If someone put me on the spot and asked, “What question do you get the most?” The clear answer would be, “How’s the Market?” For someone like me, who has never given a concise answer in their life, that is like asking me to describe the climate…in the United States. Well, here goes: Here are three organic thoughts on the market as I see it:
- Prices are holding steady for the most part. Despite conventional wisdom that higher interest rates apply downward pressure to home prices, sale prices have been surprisingly resilient. Great homes reflect this by selling quickly with minimal price reduction, compared to dated, overpriced homes that have to go “on sale” to move. One way to look at this is that these great homes are usually accurately priced in comparison. Many sellers have 2020-2023 cemented in their psyche where it was the wild west when it came to bidding wars and sale prices. Just like any market, a home will sell for what the market is willing to bear (someone is willing and able to pay) based on its condition and features.
- I don’t like these interest rates, but the deciders didn’t ask me. I cannot overstate the affect rates have on entry level home purchases. I have sooo many potential buyers in the wings that would love to purchase a home but cannot swing a payment double that (for the same home) if they were to have purchased five years ago. There is an upward ripple affect as well with move-up home purchases & higher end homes as well that slows everything down.
- Buyers are still buying. Yes, the market has slowed with regards to volume, but buyers are still buying and sellers are still selling. Back in the “olden days”, selling a home in four to six months was common. Anything sooner was considered pretty good. Because of the unnatural spike in prices and sharp drop in days on the market in that 2020-2023 time period, expectations have shifted. Reality is trying to push those expectations closer to historical norms.
In conclusion, one thing I have noticed over the past three years is that everyone has an opinion. Many of those opinions are based on inaccurate information or skewed judgement or plain bias. Media is constantly shouting a spin on what is happening and what the future holds. It is rare to find a voice echoing good judgement. If you hear an agent or lender start mentioning, “when rates fall…” run away. If they ever do, great, but don’t make a decision based on this. If you would like to have a further discussion on these matters, just AskDoug!