….and other anxiety-creating myths you might hear about the real estate market.

Part 1 of 2

There is a lot of instability right now. Not exactly uncommon for real estate during an election year. But it seems more intense today with the added pressures of inflation, interest rates, quickly falling listing prices and the overall uncertainty folks are feeling right now. I don’t know about you, but I never in my wildest imaginings thought I’d see the whole world completely shut down. Literally. It was not something I thought even could happen. Yet it did. And it had an effect on everything.

The reality check: the world didn’t end. It just changed. There’s hesitation, confusion, and unrest, but Chicken Little, the sky is not falling. In this 2-part series, I’ll share a few thoughts I keep hearing from buyers and sellers right now that could use some clarification.

#1: The real estate market is collapsing.

Clarification: The market is not collapsing, it’s just adjusting. The truth is home prices rose with a quickness nationwide and an unsustainable pace from mid-2019 to early 2022. It was an unprecedented rate of increase. Period. While prices are coming down to a perceived “more reasonable” point, it does not mean that homes are about to become worthless, and everyone is going into foreclosure. This might happen to some. But we’re not headed for another 2008.

#2: It’s a terrible time to sell my home.

Clarification: It depends. Did you just buy your home and plan to flip it a year later with a 95% loan to value? Then yes, I’d say it’s a bad time to try and sell. Especially if you put more money into it to renovate or update. You’re better off holding onto it for a few more years.

However, if you’re one of the majority of homeowners that did not sell during the frenzy, and you have a loan to value ratio of I’d say, 75% or less, it might still be a good time for you to sell. There are still homebuyers out there. In fact, 345 residential properties went under contract in Pinellas County within the last 7 days (as of Nov. 5, 2022). That’s almost 10% of the number of active homes currently on the market. Homes are still selling. People still want to buy and there is still activity happening.

#3: It’s a terrible time to buy a home.

Clarification: Interest rates may be a bit higher than the unheard of rates we’ve seen over the past few years. The reality is that the majority of buyers over the past few years did not get a rate of 2.99%. The best rate I saw for my buyers’ loans was right around 4%. Which was still dramatically low. Don’t let the interest rate scare you. You have options including traditional 30-year rate buy-downs, acquiring an adjustable-rate mortgage (ARMs and 2/1 buy-downs; then refinance later), or you can plan to put a larger down payment on the home. No matter what you do, remember: if rates come down in the near future, you can refinance when it makes sense. You’re not married to the loan!

And with the market softening right now, buyers may have some perks when shopping. More sellers are getting negotiable on the home price. Some sellers are also willing to help buyers with some of the financing costs and rate buy-downs. Additionally, contingencies (inspections, seller-paid repairs, seller-acceptable financing types, sale of another property or asset, etc.) are making a come-back. This could work to a buyer’s advantage (especially if you’re a seller looking to buy a new home). What’s more is that there is less competition for the home you want – even more so with the winter months coming (a traditionally slower season for home sales). The best part, if you ask me is that there are now more options for buyers as we have gone from a less than 1-month inventory market to about 2.5 months of inventory. All of this means you’re more likely to find a home you love, not have to enter a bidding war, and be able to get a reasonable offer package accepted by a seller. It’s a win-win-win scenario!

…more to come in part 2!

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Are you ready to start your home search? Then it’s time for us to talk! There are many ways I can help with the process and get you on your way to purchasing your next home. You can schedule your initial buyer’s or seller’s consultation by phone or video call by clicking here.

You can click here to check out the current market statistics as well. See average home prices, average time homes are on the market and how they compare year-over-year.

Not quite ready to start your home purchase journey, but want to get a look at what’s currently on the market? Click here to search current listings in the area.