What do I do in today’s real estate market?
As you can see from the above “UBG Monthly Update”, prices are still rising, however, the rate of increases is showing signs of moderation. Also, available inventory is still shrinking but the rate of inventory decline may be moderating. For right now, we are still in a strong “sellers-market”.
What to do? If you’re a buyer, should you wait for the market to cool? If you’re a seller, should you hold your home off the market and hope to get a better price later?
In order to put some data and predictability around these buyer/seller questions, let’s take a quick look at what’s changing in the market today, and more importantly, what’s likely to come next.
The fed has discussed it’s plans to raise rates (modest increases) twice more this year, and maybe three times in 2019. The good news behind this plan is that it should bring a better “balance” between buyers and sellers because the number of qualifying buyers will decline (less demand). If you borrow $250,000 to finance your mortgage, a rate increase of 1% (e.g. 4.5% to 5.5%) will cost you $298/month! We at UBG have seen this movie before:)
So, what do buyers and sellers do?
Buyers should consider how much waiting will cost them in increased monthly payment(s) (over 30 years!). If you can wait, there will be more inventory, and home price increases will moderate (but slowly).
For sellers, yes, prices will continue to rise for some time, probably through early to middle 2019, but at a more modest rate. However, rising rates will reduce the number of potential buyers (soon, not many multiple offers) and that could eventually impact your asking price.
I say this every month, but please reach out to your Real Estate Professional. These are complex and important decisions, and he or she will be able to walk you through your decision-making process with expertise and integrity!