The Good & Bad News of Today’s Real Estate Market
Unlike this Texas heat, things definitely cooled down in the real estate market! There’s been a big shift as interest rates continue to rise. It blows the mind to see it happen so quickly.
More homes showed up on the market, as usual in the summer, but now there are also less buyers looking since their buying power has been decreased. But that’s not bad news for the buyers still in the market. They may not be locked into a low rate, but their competition has diminished almost overnight. Which gives them a better chance of negotiating the asking price and terms of a contract. And compared to the 1980’s, today’s rates do not come close to the inflated ones of 19% in the 80’s.
In turn, sellers are seeing the effects too. Less buyers means less offers and less bidding wars, if any. But one of the main reasons inventory has been so low the last couple of years is because sellers were afraid they wouldn’t have anywhere to go. It was almost impossible to jump into the market as a buyer. If you were the seller waiting for the opportunity to purchase something else, you have a great chance now!
There are pros and cons to every market, whether a buyers or sellers. A buyer’s market happens when there is more supply than demand and that could also mean higher interest rates; go figure! A seller’s market creates bidding wars and favors their net income. I think it would be fair to say the market is neutral at the moment. The demand is still there, but supply has increased as well.
With less competition for buyers; homes are readily available for sellers to replace their existing one. Remember, real estate continues to be a good investment. The economy might be a little scary right now but putting your money into real property is a safer bet! And on the bright side, when you look at the 30-year trend of interest rates we remain on the lower end of history.
Key Takeaways:
- Con: Interest rates have risen
- Pro: Interest rates still remain on the lower end of a 30-yr history
- Con: Decreased buying power from rising rates means less buyers
- Pro: Decreased number of buyers means less competition
- Pro: Less buyers & more inventory of homes and land means less bidding wars
- Pro: Buyers have more time to negotiate
- Con: More inventory means sellers adjusting their expectations
- Pro: More inventory means sellers have more places to go (buy)
- Pro: Real estate remains a good place to financially invest
About the Contributors: Ryan & Sunni Chester have established themselves as self-starting entrepreneurs with 19 years in the Oil & Gas Business, seven of those operating a lease in west Texas. They spent the last 15 years, owning and operating their own Oil & Gas Company. Ryan & Sunni also know about buying, renovating, and selling homes with a profit margin. Their personal experience of being on both sides of a transaction as a buyer or seller, multiple times, means that they intimately understand their client’s position. It is this empathy and knowledge that will work well for their clients during a sometimes stressful but exciting process. For anyone considering what the first step might be, Ryan & Sunni are your go-to team.
