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Well, there have been newsletters in the past where I feel like I have been repeating myself, but not in this market. Conditions over the last 6 months have been changing rapidly. For example, we had a very strong seller’s market in March and it held through May. Much of this is related to interest rates dropping down into the 6% range. Then, in early May rates dropped again, but as the month wore on they began climbing. And so here is where we are. Rates are now fluctuating almost daily with rates back in the 6-7% range. This has cooled the market slightly.
Some homes are making it through to review dates (usually on Mondays or Tuesdays) with solid offers. True, homes are still selling, but now buyers can wait to see if multiple offers are coming in to determine if they they are facing an over-asking bidding war.
So, what does this mean for you? Buyers: write a contract that is closer to the asking price and in some cases slightly below. Sellers: price your homes at current market value and not plan on escalation addendums to increase the price of your home. Adjust your expectations! This isn’t 2021 anymore! Your home will likely spend more days on the market to go under contract.
The good news is, many forecasters are predicting lower rates in the coming months. And while inventory remains low, falling rates typically give way to higher prices and multiple offer situations. Buyers shouldn’t wait. There are plenty of adjustable rate mortgage options out there that will allow you to jump to a lower rate quickly. Sellers shouldn’t wait either. If you know you are planning to sell, start preparing your home to list because there still aren’t enough homes on the market to meet demand.
