Quick Summer Market Update

We are now two years out from the top of the real estate market which was in June 2022. A year ago, I was reporting that prices had dropped slightly from the peak. Now, prices have recovered and are right about where they were at the peak. The chart below shows that the number of active listings has increased dramatically, yet prices are up slightly and the number of sales is up slightly. Buyers have more choices and are taking more time to make a purchase decision, but prices are stable. Because inventory is up and the market has become more competitive, not all sellers will get their home sold. For sellers, you will need to price your home more aggressively in order to get it sold. For buyers, there are more homes to choose from, interest rates have come down and are forecast to come down further in September, so this is a great time to buy.

With lower interest rates on the way, I'm predicting a busy 4th quarter. Please reach out if you want to discuss the current market and how I can help make it work for you, whether you are buying, selling or both. 

All the best,

Rich

Black Friday Real Estate Deals + Happy Thanksgiving!

The real estate market has continued to slow as we enter the holiday season. This is completely normal for this time of year and as always, the slower market offers an excellent opportunity for investors and owner occupants alike. I have investor clients who have done incredibly well buying rental properties during the holidays and it's also a great time for owner occupants who happen to be looking right now. Every year there are sellers who came on the market too late in the season and at too high of a price. As the holidays approach, some sellers become very motivated.

Traditionally, I see properties selling at a 5% discount during December, but this year it is entirely possible to purchase a property for 10% lower than it would have sold for this past spring/summer. And as a bonus, it will most likely be worth more by next March. I have seen this pattern play out year after year.

High interest rates are the reason why the real estate market is especially soft right now, but interest rates have recently dropped a bit because of reports showing that inflation is under control. With some seller paid closing costs, it's possible to get a rate that starts below 6% for an owner occupant. Please call me to discuss the opportunities that the current market presents.

For sellers, it's best to list after the New Year since the market will pick up once the holidays are over. I'm predicting an active market in the first half of 2024.

If you are interested in viewing the 3rd quarter real estate statistics for your specific market area, click here.

Lastly, I'd like to take a moment to express my gratitude to you, my clients, for your business, referrals and friendship. I am sincerely thankful for you. Happy Thanksgiving to you and your family!

All the Best,

Rich

Creative Financing

The number of sales is down 20% compared to this time last year. The main reason is that higher interest rates have made homes less affordable. The current 30 year fixed rate mortgage is about 7.25%. A year ago, the interest rate was about 5.5% and two years ago it was about 3.25%. A recent study found that 71% of would be buyers say that they won't look to buy a home until interest rates get back in the 5's. It's hard to say if or when interest rates will be in the 5's, but there are creative financing options that a seller can offer in order to help a buyer lock an interest rate in the 5's.

Mortgage rate buy downs are becoming more popular and in some cases are the driving force behind a sale. If a seller pays 3 or 4 points to buy down the rate, a buyer could lock in a roughly 5.75% 30 year fixed rate (depending on the rate at the time). A seller would be motivated to pay down a buyer's interest rate because it could help sell their home and could actually save the seller money. For example - a seller who is considering reducing their price by $50,000 may be better off paying $25,000 towards discount points so that a buyer can get a rate in the 5's. In this example, the seller saves $25,000 and the buyer saves over $500 per month on their mortgage payment. The old adage in the real estate business is that, "Buyers don't care as much about the price as they care about their payment."

For Buyers who have been sitting on the sidelines, call me to discuss how Seller paid discount points could get you back in the game.

For Sellers who are hesitant because you've heard the market has slowed, call me to discuss how we can use this strategy to your advantage.

As always, I appreciate your business and your referrals. I hope you have been enjoying the end of summer.