If you’re a homebuyer, now is your chance to take advantage of our market.
Depending on which area you live in our marketplace, inventory is up anywhere from 25% to 40%. Not only that, but homes are also taking a lot longer to sell—sometimes 40 or 50 days longer than they did earlier in the year. This means you have more homes to choose from and more time to make sure you’re making the best decision possible. On top of everything else, fewer homes are selling, which means there’s less demand.
Another important factor you need to be aware of is rising interest rates. I’ve been talking about this for the past few months, but interest rates hit a seven-year high recently and they’re predicted to continue climbing. For every 1% that rates climb, buyers’ purchasing power decreases by 10%.
Despite all this, a lot of my clients are still saying, “Robert, if the market is flattening and prices are dropping, why not just wait a little bit and get a home for a better deal down the road?”
If rates rise by another 1% and homes values drop by 5% (which is a very likely scenario), you’ll actually be spending more money per month for a home that, on paper, you’ll seemingly be getting for a better deal.
To be clear, I’m not saying every potential homebuyer should buy right now. I’m simply saying that if you can afford to buy and you actually want to buy, you should consider doing so right now. During the last six years, a lot of buyers I worked with wished they had more time to make a decision and that they weren’t getting caught up in bidding wars as soon as they found a property they liked. Well, now they’ve got their wish.
However, since our market is changing, it’s also creating doubt. That doubt is creating fear, and that’s causing buyer paralysis. Since they’re not sure where the market is going, they’re thinking they might be better off taking a step back and seeing how everything plays out. I’m here to tell you that doing nothing is a really bad idea.
Lastly, keep in mind that just because you meet with a Realtor (or at least someone on our team) it doesn’t necessarily mean you’re buying. When we meet with a buyer and determine their needs, we may decide that they’re ready to buy now, but we also might decide they’re better off waiting a year. That’s why, if you’re considering buying, the best advice I can give you is to get in touch with a local Realtor. If you call us up, we’d love to talk more about your goals and see what your options are.
If you have any other questions about our Orange County market or you’re thinking about selling a home, feel free to reach out to us as well. We look forward to speaking with you.