Anyone who’s bought or sold a home in recent years knows that the market has been exceptionally cutthroat. With low interest rates and low inventory levels, people have had to move fast to get a deal put together and pay more than usual for their dream home.
The inventory has risen slightly since the beginning of the current market trend, but the demand for homes is still much higher than the supply.
“We've been short on inventory for quite a while now, especially in the lower price ranges which is not a surprise if you look at last year. In the higher price ranges, which I consider a half-million dollars and up, inventory is low too but it's not as low as it was a year ago,” said Jeanne Sommer, owner and managing broker of Century 21 Alliance Group.
Additionally, the Fed raised the interest rates by 0.75% on June 15, marking the largest increase since 1994. This may cause some prospective buyers to postpone their plans, but Sommer feels the demand for houses will generally be unaffected. The market will not crash like it did in 2008 but will merely adjust itself throughout this period of change.
Since interest rates have risen, buyers who had been preapproved for a specific price point may not qualify for the same amount now that the rates have increased. For example, if someone was preapproved to buy a house for $250,000 before the rates increased, now they may no longer qualify for that same amount.
While this can put homebuyers in a less-than-ideal situation, the market has been advantageous to sellers. With such low inventory and high demand, home prices are up and sellers are selling their homes for top dollar, and sometimes over the asking price. This does, however, mean that sellers looking to buy will also be paying top dollar for their new home. “Even downsizing may result in paying the same or more than what they sold their larger home for,” said Sommer.
To ensure buyers are getting to view and make an offer on their dream home, Sommer recommends keeping up with preapprovals – especially in light of increased rates.
“Buyers really need to stay on top of getting preapproved frequently. You could’ve been pre-approved for a certain amount last week, and this week or next week, it might be a different amount,” said Sommer.
It’s also important that prospective buyers are ready to buy when the opportunity arises. With such high demand and so little inventory, when a new home comes up on the market and is priced right, sellers often have numerous showings the first day with multiple offers. “If buyers aren’t ready to make an offer immediately, they will most likely miss out,” said Sommer
Buying or selling a home in this market often feels harder than ever, which is why it’s so important to find a realtor with experience. The agents at Century 21 Alliance have the knowledge and experience to navigate the toughest of markets with ease and will help buyers and sellers get the most out of their homes no matter what their budget or situation is.
“Whether it's us or another firm that they're working with, it’s vital to work with an experienced realtor, especially in this market. They could save you money and they have the necessary knowledge to get you to closing, which is the goal. It's a lot trickier than it was five or 10 years ago,” said Sommer.
To find an experienced realtor to help sell your home or find your dream home, visit https://www.21alliance.com