If you haven’t noticed it’s been pretty crazy in the real estate world over the last 2 years. Home prices are rising, interest rates are bouncing around, and buyers are getting frustrated. The overwhelming feeling that buying a home in an impossible feat because it’s just too competitive. But what if you had some data that would help you make a smart decision when it’s your turn to buy? I’ve put together some facts and trends that will help you make a sound decision.
Real Estate Prices Are Rising But Getting Less Offers:
2017 and 2018 were insane, we saw at 10%-20% jump in home values and a shortage of home sales. Every home was getting 10-20 offers on it, we’ve never experienced anything quite like that. Values were higher than they were in 2005-2006 before the crash.
This year (2019) it’s a different story. Although home values are rising, they’re rising by a slower rate. Instead of the 10%-20% jump we are expecting a modest 2-5%. The result will be an increase in home sales. The reason for this slow down? Rising interest rates and overwhelmed buyers.
What This Trend Means For Sellers
Sellers have enjoyed a bull market for some time now, being able to pick and choose the best offers and cash offers. When the market starts to ground itself, we will see more homes becoming available and less competition. This means sellers will likely start to negotiate their sale more. With a lot of buyers being priced out of the market right now, it means less offers will come through the door until values decrease a little. To get the best result as a seller, working with a qualified real estate agent is #1.
What This Trend Means For Buyers
A sellers market is a buyers worst nightmare, but with it leveling out and more buyers waving the white flag of surrender, you will see the the market open up and reward those who endured the worst. But in the meantime a smart buyer is coming to some realizations:
1) They are having to sacrifice some “wanted items” in exchange for the necessary ones.
2) Expand your horizons and where you would consider buying a home. There are good deals in areas outside the basic search zones.
3) Be aggressive. Get pre-approved and make competitive offers.
Mortgage Rates Are On The Rise
It’s not secret, we’ve experienced abnormally low interest rates for years. The time has come to see them rise, albeit slowly, they are rising. This is resulting in market trends like decreased offers and home sales.
The Majority Of Home Buyers Are Millennial’s
Millenial’s are a different type of buyer than most sellers are accustomed too. They have different criteria behind their purchasing. Millennial buyers are looking for convenience,
- Easy online shopping. The home search starts online for millennials, so you need to make the best possible impression on the internet. Make sure you invest in high quality photos, and, for extra measure, consider using a drone to take aerial video footage.
- Quality over size. Yes, square footage matters. But millennials are more concerned about how sustainable and usable each space is. Get rid of your junk so they can visualize a bright future in your home without your stuff there.
- Location. A lot of millennials are looking for homes in 18-hour cities like Nashville, Tennessee, or Austin, Texas, that offer big city life at a more affordable cost of living. If your home is in a walkable area with access to public transit, expect millennials to come knocking at your door.
- Low-maintenance lifestyle. Millennials are used to living in the age of high-tech advances and Amazon Prime. They’re looking for energy-efficient homes with smart appliances. If you don’t have them, they’ll look elsewhere or lower their offer so they can upgrade after they buy.
The Take Away
With the market behaving like it is there is talk about another crash. People are still cautious about real estate after the last crash, and with good reason, but all the indicators are pointing towards a steadily increasing market.
We are experiencing low unemployment, rising rates, people are spending money and are generally optimistic. There is a surplus of cash which indicates people are not leveraging themselves as much financially. Taxes have decreased and there is more interest in real estate than ever before. We can rest easy for the time being that we are in a steadily increasing market.
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