What You Should Know About Our Slowing Market

What You Should Know About Our Slowing Market   Why our housing market is slowing and how it affects your home. Is the real estate market slowing? You may hear about this on the news or from your friends, and many of my clients have asked me this question. With the recent interest rate hikes, everyone wants to know if the market is slowing. In short, yes. The market is slowing, but not as much as you think. We’ve seen a dramatic change in our market recently. Inventory increased significantly in April, according to both Zillow and Realtor.com. The chief economist at Realtor.com notes, “If the trends we’re seeing now hold true, we could potentially see year-over-year inventory growth within the next few weeks.” At the same time, buyer demand also decreased. The number of new mortgage applications fell in April for the third month in a row, and existing home sales dropped 2.4%. Without a doubt, the market is starting to shift from the hot, pandemic-fueled one we had for the last few years to one that favors buyers slightly more, and there are a few main reasons why we’re seeing this change. First, as you may already know, the Federal Reserve has started fighting inflation by raising rates. Mortgage rates have risen around 2% to 3% since the start of the year and may continue to climb. That has a direct effect on buyers by making it more difficult to afford a home. As a result, demand has fallen.  The market might be slowing, but it’s still a good time to sell your home.  On top of rising rates, we’re also seeing a surge in newly-built homes and altered zoning laws aimed at increasing the housing supply. As the Biden administration notes, more homes will be built this year than any since 2006. So the market is slowing down, and the primary cause is increased interest rates. How does all of this affect your home? The drop in buyer demand has already led to immediate changes like fewer multiple offers on properties. In April, Redfin reported that only 60.7% of its offers faced competing ones, which is down from where it was a year ago at 67.4%. Home prices are still increasing, but some experts predict that prices could flatten soon as inventory increases and demand falls.  Keep in mind that this doesn’t mean our market is crashing. Most experts agree that poor lending practices were the cause behind the 2007 crash, and today’s lending standards are much tighter. However, it’s important to keep the context of our market in mind. Home prices have risen 34% over the past two years, and while inventory is increasing, it was still 48% below pre-pandemic levels in April. The market might be slowing, but it is still a very good time to sell your home. If these trends continue, now may be your last chance to sell near peak demand and get the most for your home. If you need any help selling your home or just want to ask some questions, I’d be more than happy to help. Feel free to call or email me.    Written by Ruby Miranda on September 28, 2022. Posted in Market UpdateTags: homeownership, Market Update, Real Estate Trackback from your site. Leave a Reply  

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So Your Appraisal Came in Low—What Now?

So Your Appraisal Came in Low—What Now?   Don’t let a low home appraisal disrupt your sale. You have options. Despite rising interest rates shrinking your potential pool of buyers, now is still a great time to sell your home. Home prices continue to increase, just not as quickly as they did over the last couple of years. Still, keep in mind that rising home values can also present a challenge for sellers. Most buyers in today’s market are financing their home purchases with a mortgage. To be approved for a loan, lenders require buyers to have an appraiser come out to the property. This is the bank’s way of verifying the home’s value so that they know it is secure to lend the buyer money. In a rising market, the appraised value of your home could come in lower than your asking price. This doesn’t happen very often—around 8% of the time, according to a 2018 Fannie Mae report—but if it happens to you, what can you do? First, confer with your real estate agent to make sure your home isn’t overpriced for the market. If it is, you’ll need to adjust your price to align with the current market conditions since most buyers won’t want to shell out thousands of dollars to cover the difference between the appraised value and the asking price. It won’t be as difficult as it was in the past to find a buyer willing to bridge the gap.  If that’s not the issue, look over the comparable sales in your area. The appraiser already bases their value on comparable home sales nearby, but you might be able to find better comps to justify your asking price. Otherwise, you could ask your potential buyer to make up the difference. Many buyers don’t want to do this, but you have the upper hand in a seller’s market like the one we’re in now. Some may even agree to an appraisal gap guarantee, which ensures they’ll pay the difference if your appraisal is low. If you’re motivated to sell your home, and getting more than your asking price isn’t your top priority, you could also simply lower your asking price to match the appraised value. That could entice your buyer to increase their earnest money deposit, depending on how you negotiate. Finally, if you and your buyer can’t come to an agreement on how to proceed, they could cancel their contract and walk away. That would allow you to go back to square one and order a new appraisal altogether. If you’ve thought about selling your home and would like to know what yours is worth, visit my website to use our online calculator. If you have any other questions about selling your home or the market in general, don’t hesitate to give me a call or send me an email. I’d love to speak with you.   Written by Ruby Miranda on September 15, 2022. Posted in Sell Your Home Trackback from your site. Leave a Reply

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Contingent vs. Non-Contingent Offers

Contingent vs. Non-Contingent Offers   How is a contingent offer different from a non-contingent one?  What’s the difference between a contingent and a non-contingent offer? Understanding these two types of offers is more relevant now than ever since we’re in such a tough market for buyers. A contingent offer means that to purchase a home, you need to sell your current one first. This usually happens when a buyer needs the funds from the home sale for their purchase. On the other hand, a non-contingent offer means you don’t need to wait to sell another home to purchase a new one. It’s usually more attractive to sellers since they often make a more straightforward and smoother closing process. There’s a high chance that your contingent offer will be rejected for a non-contingent one.  Currently, the real estate market is hot, and most homes are going under contract with multiple offers. If you make a contingent offer on a home now, there will likely be non-contingent offers competing with yours. Unless you’re planning to offer the highest bid, your contingent offer will probably be rejected for a non-contingent one.  However, making a non-contingent offer in the current market is not a hopeless case. Don’t give up yet. I have several strategies I suggest to my buyers to make their offers stand out and win their dream home. If you’re considering taking advantage of today’s market and want to learn more about how I can help you craft a winning offer, don’t hesitate to call or email me. I’ll be happy to help!   Written by Ruby Miranda on July 15, 2022. Posted in Buyer Tips, Uncategorized Trackback from your site. Leave a Reply  

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