When it comes to the market, I’ve got one simple piece of advice: Stop thinking like an investor, especially if you aren’t one.
Before I explain what I mean by this, I’d like to first cover a few important points about our current market.
1. Demand is down. More homes are available, which means buyers feel less pressure to get out there and make a purchase on a home they may not love.
2. Fewer homes are selling. As a result of our increased inventory, sellers are faced with higher competition. Pending and closed sales are down between 30% and 35%, which, obviously, has had a major impact on market conditions in general.
3. Homes are taking longer to sell. The homes that are moving off the market are taking 50 to 100 days longer to do so.
4. Prices are flattening out. With demand down, prices have dropped in turn. Our shift toward a buyer’s market has become increasingly clear through this and other factors.
5. Interest rates are volatile. Nobody has a crystal ball, but all signs indicate that rates will continue rising through the end of this year.
With these conditions in mind, let’s circle back to my first point. Buyers and sellers need to adjust their mindset in light of our current circumstances. Thinking like an investor is no longer the right way to navigate the market.
“Think about why you’re buying or selling and put that reason first.”
Buyers who ask about a home’s resale value are a prime example of what I mean when I refer to people who are thinking like investors. Rather than thinking about the property they’re buying in terms of how well it will suit their wants and needs, too many buyers are focusing on what they think they can earn from it down the line.
Our team has encountered buyers who, because of this mindset, turned down a home they loved simply because it wouldn’t have made a lucrative rental property for them in the future. This would be valid if they were buying it as a rental to begin with, but they weren’t. This home was going to be their primary residence. The idea of renting it out was purely speculative.
Many sellers, too, have fallen victim to this mindset. They may want to list their home and have many good reasons to do so, but choose to hold onto it instead because they want to wait for a better market. In short, my point is this: Think about why you’re buying or selling and put that reason first. Don’t derail your goals because you got caught up thinking like an investor.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.