Attention Buyers! Marry the House but Date the Rate
Happy summer! While our weather is hot, the real estate market is cooling. Rising interest rates and inflation are impacting buying power and an increase in inventory is giving buyers more choices. Fears of recession and stock market volatility are compounding the challenge. We're still technically in a seller’s market but the tone has shifted dramatically.
On the Eastside, prices fell 13% from their April peak. Last month we had under a month’s supply of active listings, we now have 2 months. In June just 39% of homes sold above their asking price whereas February, March, & April showed an average of 84% of homes selling above list. Homes are experiencing longer market time and often having to do a price drop before getting under contract. Still, the news is not all doom and gloom. In fact, a recent CNBC Article cited Seattle as 2nd in the top ten most stable housing markets in the country.
As a result, experts are predicting an 8-10% appreciation year over year, with a recent Zillow Home Values index confident in a 9.6% increase by May of next year. Still, the rise in interest rates is impacting affordability. Buyers - rates are not likely to come down any time soon. Nor are sellers likely to drop their price significantly enough to make a substantial impact on your mortgage payment.
If you find a house you love, MARRY the house and date the rate.
When rates come down you can refinance. Another win-win that both buyers and sellers should explore is a seller credit for buyer to buy down the interest rate to get their mortgage into the affordability range. In this example a for a home priced at $1,135,000 and an interest rate of 5.6% your payment would be $5,156. To get your payment to $4,601, the seller would have to drop their price by $122,000. OR they could offer a $22,000 credit to enable you to buy down the rate and achieve the same payment.
This is attractive to BOTH buyers and sellers and an effective tool in today’s market. If you’d like to learn more about this or other ways to be successful in our shifting market, please don’t hesitate to reach out.
Call/text or email me anytime! ginam@windermere.com.
