New but Not New Market.
Traditional Market. Now that we are settling in to the new, but not new, norm, what can you expect in this current real estate period?
Nothing to See Here
Experienced REALTORS®, or at least those that study market history, know there isn't anything wholly new about our current market. It may feel like a small jolt to suddenly have listings that take slightly longer to sell but the various segments of the market and jumpy interest rates are but a representation of how the local home network operates, traditionally speaking.
Interest rates are currently high, but not high, as history shows us. The stats since 1975 tell its own story with the average 30-year fixed rate mortgage ranging from 9.05% up to 16.63% in the 70's and 80's, averaging high 7's in the 90's and then going on a low run after 2000.
Along with fluctuating interest rates, various segmentation in how the market acts and longer listing periods, in contrast to the past couple of years, are traditional traits of our local housing industry. Different price points compete differently and higher interest rates simply give buyers pause to consider their buying power and priorities.
Let's Break it Down Further
Currently, we are seeing differing trends in various price segments of homes sold or on the market. Homes priced under the mid-200k mark are HOT. Multiple offers, less days on the market, and a higher sale-to-original-list-price ratio create a real estate category that buyers have to be ready for. As you move up in list price, sold pricing remains high but the competition slows down slightly. The 250-499k and 500-799k segments seem to flip flop throughout the course of the year, trading stats back forth as to which price range performs better. Undoubtedly it has to do with perceived value and condition for buyers who have the ability to go up in price point when they feel its worth it. lop throughout the course of the year, trading stats back forth as to which price range performs better. Undoubtedly it has to do with perceived value and condition for buyers who have the ability to go up in price point when they feel its worth it.
What does that mean for a buyer or seller?
Put Experience to Work For You
Buying and selling in any market is a personal journey with value and home priorities being highly subjective. There are deals to be had out there but it takes the right agent and team to navigate this traditional market.
For sellers, this is still a great time to sell with average sales prices remaining high, it just means being prepared. The first impression of a home is lasting and impactful and can make or break a buyer's perceived value. Those considering selling this Fall and Winter should consult their local professionals, such as Team Clancy, to ensure their home hits the market ready to be SOLD. Seller also need to be aware of conditions in each price range that can affect days on the market and PRICE.
Buyers can expect a similar, more careful approach to this traditional market and being READY with expert guidance is an essential piece of the buying puzzle. But being prepared isn’t just about pre-approval with an experienced lender, although it’s crucial to buying success in this market, it’s more accurately about market education. Understanding buying power and how it fluctuates with interest rates as well as different loan types can make the difference in the approach to homebuying as well as prioritizing needs (vs wants) and understanding how a home is priced.
All information deemed materially reliable but not guaranteed. Provided by Greater Kalamazoo Association of Realtors.
Buying a Home in a Traditional Market
The lack of competition on both sides of the for sale sign offers a slight relief for buyers, creating a little more wiggle room to shop. Although finding a home that fits your needs and budget can still be a challenge (some price points and ready-to-move-into homes are moving quickly) higher interest rates are keeping some home buyers browsing online making the competition a little lighter. With the right real estate team behind you, you can find value in our current homes for sale.
Buying a home in a seller's market can be a frustrating process if you aren't prepared. The market may be shifting to a more traditional style but you still have to be prepared. Here are some tips to get you ready to buy in today's fast-moving seller's market:
Price: Be Ready to Make a Strong Offer
Chances are, you will already have a price range in mind when you start your home/property search. In a normal market, you leave room for negotiation, your initial offer is often at the bottom of that range. However, in a seller's market, one can’t expect to go about it that way. Since you’re going to have a lot of competition, the price you initially offer may be your only shot at that property. In a seller's market, we tell our clients to be prepared NOT to get a 2nd opportunity to make an offer or negotiate. Make certain your offer is a strong contender, free of unnecessary contingencies as well as risk & uncertainties that will make the sellers uncomfortable. MAKE YOUR OFFER EASY TO SAY YES TO!
If you don't want to miss out on a property you love, make sure you are pre-approved for a loan BEFORE beginning your home search. Seller's will take you, and your offer, more seriously if you are pre-approved.
Most offers have 3 contingencies: loan approval, appraisal acceptance and satisfactory inspection results. These contingencies, if not fulfilled, allow a buyer to terminate a contract to purchase and retain all of their deposit money. There’s nothing worse for a seller than having their property tied up for a long period only to have things fall apart. Not having additional or high risk contingencies, minimizes the seller’s exposure and makes your offer look all that much better.
Also, ensure that your offer is NOT contingent on selling your current home. With buyer competition strong and multiple offer situations prevalent, sellers will likely choose to pass on your offer (even if it is higher than the others).
Bridge Loans Available
A bridge loan can help ease the transition from one home to another.