Have sellers missed their opportunity to get top dollar for their homes?
Have housing prices peaked? I hear this question often when I speak to sellers about whether they should list their homes now or wait for the market to shift.
Over the last couple of months, we’ve seen interest rates climbing to the mid-5% range. At the same time, inventory levels have started to rise, buyer demand has dropped off, and inflation has become more of a problem. Despite all this, **I don’t think sellers have missed the boat. **
Interest rates have been a key driver in our market over the last couple of years. They made the cost of owning a home cheaper than renting. Our market has also been fueled by COVID and the migration of people who can work from home.
In recent months, the Federal Reserve has announced they’ve increased the Fed Funds Rate by 50 basis points to combat inflation and that they’ll continue to do this throughout the year.
Affordability is the primary concern among buyers in our market, but it’s not all bad news. Though many homes in desirable neighborhoods are selling for top dollar with multiple offers, overpriced houses are left sitting on the market and might have to go through price adjustments before they’ll sell. If you’re a buyer, this could be an opportunity for you to buy a home without waiving all your contingencies. You might even get a property for market value instead of having to offer tens of thousands of dollars over asking price.
If you’re a seller, pricing your home correctly from the start is crucial. I recently took a listing that I thought was fair market value, but it ended up sitting on the market for longer than expected. Why? The market has begun to shift, and some higher price points are being impacted by issues of affordability. Rising rates have increased buyers’ monthly payments by a significant amount, causing many buyers to retreat to the sidelines and wait for things to get better.
For sellers asking if they should sell now or wait, my answer is that we know what the market is doing right now, but we don’t know what it will look like in six months to a year from now. Selling now is certainly a great option, but at the same time, don’t just sell to maximize your profits without a plan. You’ll need to figure out where you’ll be staying afterward, and as we’ve already discussed, buyers are not favored by this market.
Whether you’re looking to buy or sell a home, we would love to have a conversation with you to guide you through this volatile market. Give us a call or send us an email. We hope to hear from you soon!