It's like music to a buyer's ears! "The return of a buyer's market". Seems great but there's a catch. Rates are much higher than they were even a year ago. What does this mean for a buyer? Let's take a real look at what the market is doing and what it means for both buyers and sellers.
A look through the Buyer's eyes
Not so long ago interest rates to purchase a home were as low as 2.875%. When you are living the moment, it is easy to forget that rates were higher just a few years before that. In fact, this isn't the first time we have faced an increase in rates or even truly high interest rates! Low rates were never going to last forever, yet somehow we expected them to and that has made it difficult to face the reality that rates will ALWAYS change. So, how do we move forward in this market if we need to buy a home?
1. Home prices have HAVE to come down.
Let's be real here. There is absolutely no logical reason that a home which sold for $380,000 in 2019 is now worth over $900,000. I'm sorry, it just isn't even feasible, and yet, there is the listing. Though I don't believe we will see the lower prices we had a few years ago (our new normal points to being around the $300,000 mark) We definitely need to be more realistic about home values.
2. Expectations need to be reevaluated.
The fact is, rates are not going back to 3%. We need to adjust to the fact that rates are where they are right now and reevaluate our needs and wants. Buyers are not the only ones who need to compromise here. Sellers also need to come to grips with what the TRUE value of their home is. The bidding wars are gone as are the contracts with no contingencies meaning buyers are now in a much more comfortable position leaving them with time to think about their purchase. Both parties need to work together again for everyone's best interests.
3. Buyers and Sellers BOTH need an agent who will work as their advocate
As a seller, you will always be able to find a Realtor who will list for whatever you think the house is worth. However, this usually leads to frustration when they come back to you time and time again asking for a price reduction. If you want your sale to close, you need to be sure that you are listed at true market value and that will take an agent willing to work a little harder to figure out what that is and what they need to do to sell it. You never want to be in a position where your home won't appraise and you don't want to be the house on the market forever with no offers.
As a buyer, you will need an agent who can provide you with the ACTUAL market value of your intended purchase and will look our for your best interests, not just their closing check.
4. Buyers need a Lender that they can trust who offers some different loan options
It is important to know what your options are. There are programs available for first time buyers, first responders, Veterans, USDA loans, Conventional loan options, FHA loans, and even zero down programs. A local lender will be able to help you find the right loan program to fit your needs.
I realize that this doesn't answer all of your questions and I am here to help you in any way that I can. If you have additional questions, feel free to CONTACT ME at any time! You are never under any obligation to use me. I am happy to help in any way that I can!