The Shifting Real Estate Market

So, what exactly is going on with real estate, anyway?

Six months ago, I was in Scottsdale, AZ looking for a snowbird home for our family and trying to figure out which area we wanted to be in.

I remember one gorgeous day I set out to go to a few open houses scheduled for that lovely Saturday afternoon. 

After a nice lunch at Cielo's hotel restaurant in Fountain Hills, I drove to a nearby neighborhood on a golf course to go through the first open house on my list.

As I followed the directions to a cul-de-sac and the house at the end of the street, I was surprised to see 12 cars parked up and down the road.

When I got inside, it felt like a party was going on. People everywhere having conversations with each other and either one of the two agents on hand.

I told my husband that I loved it and the location. But, surprise, surprise...it was under contract before I even got back to where I was staying!

THOSE DAYS SEEM TO BE GONE.

Back in Snohomish, WA, I listed our home just as mortgage rates shot up, then back down and then back up again.

Consumers don't like it when rates fluctuate so drastically, and combine that with an election year...and we are seeing a speed bump in spending.

The number of listings under contract is under 10,000 for this time of year. And an over 200+ increase in supply over the past 3 months is putting pressure on sellers to compete (paying buyer's closing costs, etc.)

A sign of the times. But let's not panic just yet.

LET'S START WITH SELLERS

On one of the flights back to Washington from Phoenix, I was seated in front of two guys, strangers who struck up a conversation. One of them had a wife who was a real estate broker in Spokane. I overheard that she received 19 offers on a home within 24 hours of it being listed.

And that's a story we heard over and over again about buyer's waiving inspection and even writing letters to the sellers as to what makes the home perfect for them.

Now, multiple offers, waived inspections, offer review dates, love letters...are in the past. It's now a more balanced market with longer days on market, price reductions, repairs, staging, multiple open houses, seller-paid closing costs, etc.

FOR THE BUYERS

Supply is up and pricing has come down for buyer's who just could not compete even three months ago. And with over 50% of active listings added by developers and investors, buyers can get into a new home at a more attractive price.

As interest rates fluctuate, buyers are locking in the price of the home and not necessarily the interest rate (which can be refinanced down the road). Forbes estimates that mortgage rates could go as high as 7% by the end of 2022. Read article here.

Some sellers are offering seller financing to help offset mortgage loans and developers are helping buyers lock in on special rates and financing. This from one developer:

"Free rate lock on homes closing by October 31, 2022. For a limited time, Toll Brothers is offering a 165-day rate lock at no cost on quick move-in homes that close by October 31. Don't wait to make your dream home your own. Lock your rate in today."

While predictions are just that, and new options become available as we nestle into this more balanced market, buyers and sellers will have to decide what is best for each, respectively.

xo, Tammy