Our winter market has been exceptionally strong since late November. Homes in most price ranges and geographies have sold quickly with very little competition and lots of demand. This is great news for home sellers, so don’t doddle if you’d like to take advantage of these circumstances. For Buyers this isn’t so great. The stock market gyrations drove down interest rates to 5 year lows, as did economic worries and woes around the globe which increased buyer urgency to capture low rates and offered some relief for those “bidding” above and beyond Seller asking prices.
We’ve seen this scenario for the past 4 years now; a bit less so last year but still a strong winter to early spring market bounce. What we also saw the last couple of years were sales prices moderating in the “over asking” price range to more commonly in the 2-3, sometimes 5+% range. This is much better than in 2016 or early 2017 when 20+% was more normal for the winning bid over the asking price. So far this year, it seems to be mostly in this 2-3% range but activity has been very strong and I’ve seen some homes generating 10+% over their asking prices.
While our local market has great optimism and continued pricing pressure for home values, it’s important to recognize that if you are a Buyer have some patience, some time before you have buy and move in and some diligence in your efforts and readiness, you will likely be rewarded by waiting a bit in time. The last few years have seen a pretty dramatic decline in the percentage of “over asking price” offers and what some might think are overly inflated prices. This market shift has been occurring between mid-April and Mother’s Day weekend the last few years, so by very early May. That’s not great relief if you must buy/move now, but it can help you monitor the market for current data points on home values and then be better prepared when more homes come on the market later this spring.
We may see some rise in interest rates from the low levels we presently have, but most expectations are for interest rates to rise from the 3.375 range, back to our more normal level of last fall where 3.5-3.625 were the steady norm. Even if they climb to 3.75%, we’re still in very favorable ranges for borrowing. Don’t let fear drive your decisions. You may also want to consider learning about other possible neighborhoods or areas that might fit your life, school, commute needs, etc. and which might provide some variance to the price points and choices you’re seeing.
One final point for consideration; find an experienced, committed agent who will listen to you. You need experienced and calm help to guide your searches, prospects and offer processes. When the markets get heated, Sellers and their agents want to dictate and control as much of the process as they can. That’s a reasonable expectation. You need to have a known and respected agent, lender and support team to guide you in how to “show up” on an offer and in offer negotiations, so your offer is the best that it can be. There are a myriad of details and nuances that can improve your offer, besides just price. Believe it or not, price doesn’t always win. Sellers care about certainty in the buyers’ offers and that’s something you, as the Buyer, can control. I’m happy to help educate you on what makes the best offers and how to win when your new home shows up. Give me a call or email to meet and talk about your needs and concerns. We can set a strategy or timing plan to make you happy, better informed and ready to act and win.
Photo by Robson Hatsukami Morgan on Unsplash