All the buzz in the news about interest rates has given many buyers pause. We get it. Rate hikes when combined with higher price points is not a great combination when potential homeowners are already financially stretched or hoping to find a deal. Before you get scared away from the real estate market all together, there are a few important factors to consider. First, the low, low interest rates we had been seeing were not the norm and very well may have been a once-in-a-lifetime occurrence. Waiting for interest rates to take a dive is neither realistic nor strategic. Second, current interest rates are not astronomically high in a historical context. What we are seeing now is about on par with rates in the late 90s-early 00s and we’re not yet approaching double digits. Third, balance is what we’ve all been hoping for in the market. The pandemic years saw a boom in housing prices driven by competition and low interest rates. While it was good for those who wanted to sell and a wash for those who paid more, but managed to lock in a low interest rate, it was less than ideal for just about everyone else. And, quite frankly, the level of increases in value we saw in the last two and a half years is not sustainable or healthy for the local economy. A community in which homeownership is not attainable for the majority of residents is not where we want to be. Right now, we are starting to see the market begin to balance itself. For a time that will mean a noticeable slow down, but that will ultimately translate into more inventory, greater confidence among potential home buyers, and, after a long and very noticeable hiatus, a shift of power to the buyer once again. True negotiations will be back on the table and we’re ready for it. We see this shift as an opportunity! Get in touch with Scout if you want to start thinking about next steps in this changing market.
Project: Real estate brokerage’s monthly newsletter distributed to colleagues and past and potential clients.
Objective: Give some pop real talk about how interest rates affect the market and what that looks like for buyer or selling a home.
Elizabeth Merritt 