There seems to be a lot of fear surrounding this housing market. Interest rates have skyrocketed and home sales are slowing down, making people worried that there’s going to be another crash. But I've got some good news: what we’re actually seeing is the market heading back toward normal, to a balanced market.
Higher Interest Rates In The Market
Interest rates are still high and changing constantly. This is making houses a bit more unaffordable for many buyers. The rising rates have changed even our perspective of what is a good interest rate—5% is now considered good.
Because of today’s high rates, fewer houses are being sold, leading to more uncertainty in the market.
Remember, though, the market is always changing, and interest rates go up and down. We can expect rates to come back down, probably within the next 12 months.
Inventory Is Increasing, Demand Is Decreasing
There has been a rise in the number of houses on the market, which is typical for this time of year. But the increase is mostly due to the fact that there are fewer sales happening rather than more houses coming on the market. It's clear that high interest rates are imapcting demand.
Overall, the market is more balanced, and it's neither a buyer’s nor a seller’s market right now. There are still some areas that are hot, but they are also seeing a cooling.
When the interest rates do drop, the demand for houses will rise again. When rates come back to around 5 percent, we’ll see more buyers in the market.
If you’re a buyer looking for a deal, now is the time. The spring always shifts in the seller’s favor, so don’t wait until spring. The best time to buy is from October to December.
Looking for a bargain? Consider finding a builder. Homebuilders often want to sell before the end of the year.
If you don’t need to sell now, I would advise you to wait. This market truly is for serious sellers.
Yet, if you do need to sell now and you’ve owned your home for a while, you’ll still be in good shape. Just note that you may get less of a profit than you had hoped.
Homes are taking longer to sell— so you should expect to be on the market about 2 months. The homes that are selling quickest are those that have had improvements done.
As a seller, you may have to take some concessions in order to sell, and you probably won’t get a price above asking. Sellers are getting close to 98 percent of the asking price. In a normal balanced market, that number is 97 percent, so this is a good ratio.
The Overall Outlook
While the housing market in the Valley is not the hot market we had a few months ago, don't feed into the fear in the market because of the declining sales and high interest rates. This change can feel like a cause for worry, but historically, it’s actually good news. The market is just making a correction and it is going back to a regular buyer’s market.
In time, we will see reasonable, stable interest rates and more home sales once again. Connect with me today to find out more about what you can expect if you're looking to buy a new home or sell your current one.