Market Update - Good News for Buyers and Sellers
Every time you turn on the news, you are hearing about inflation, the possibility of a recession, and rising interest rates. What does all this mean for the housing market?
First caveat, I of course have no crystal ball and can only tell you what I am seeing in the Athens, Watkinsville, and surrounding areas and what trends seem to be emerging in the real estate market here. Through this summer, for the past two years, most homes were experiencing bidding wars with house prices rising on average 25% year over year. Clients who bought a home in 2021 could sell it in 2022 and make a profit even after paying real estate commissions. With interest rates hovering around 3%, you could borrow more money for a lower payment and it was reflected in what people could pay for homes. With rates rising, a $300,000 loan is going to cost you about $500 more a month in payments than it did in December of last year. So practically, what does that mean for the market as a whole?
Fewer homes are selling with bidding wars. Some still are but it is no longer assumed that every home will have multiple offers forcing buyers to give up contingencies and bid well over list price to be able to purchase a home. This is great news for buyers.
I am starting to see price reductions on nice homes in good areas. These reductions are not putting prices back to where they were two years ago or even last year but it means prices are starting to stabilize. I don’t think we will be seeing the kind of growth in home prices year over year that we had been having (which was really partly because we had not had enough rise in house prices over the past decade and it caught up quickly). This too is great news for buyers.
There is still not enough housing inventory, at all price points. Sellers, this means that you will still have plenty of people who will want to buy your home. This is great news for sellers.
The bottom line is we are moving back towards having a more balanced market which is really good news for everyone. For sellers, your house has to be priced well or it could sit on the market and end up selling for way less after multiple price reductions. For buyers, you need to work with an agent who can get you that well priced house in a biding war or know when to get you a lower price or seller paid closing costs. If you want to make a change to your housing situation, don’t let the news keep you from moving forward. It’s still a great time to buy and sell homes.
