- Michelle Plunkett
The Summer Breeze Brings Change
It is human nature to "stand still" when change finds its way into your life. However, change is not always a bad thing as it often ushers in new opportunities for those who are prepared and ready to act. The trick is to properly understand and predict the implications of that change.
Locally, we are currently experiencing a decrease in demand from home buyers as is typically the case in the summer months when many shift their mindset from their home search to travels and summer fun. The serious uptick in interest rates has also suppressed demand as buyers take a step back to evaluate.
What is the Impact of this Decrease in Demand?
Undoubtedly, the new rise in interest rates makes buying a home a more costly endeavor. In fact, it is now increasingly important to shop for the best lender suited to your situation in order to ease the impact of these higher rates.
Some have anticipated, or hoped, that the higher rates will result in a decrease, or even a crash, in sales prices. We do not see the market breaking as such at this time. We do expect a deceleration; in other words, prices will not increase at the same white hot pace as in the past couple of of years. When racing at 120 miles per hour on the autobahn (or 193 kilometers per hour) and you slow down to 90 miles per hour (145 kilometers per hour), you are still traveling at a rapid speed! The same applies here; prices are still strong but they are stabilizing, or increasing at a slower pace, as we move to a more normal market.
Why Isn’t a Decrease in Demand Leading to Lower Prices?
We continue to have far less homes on the market than the demand requires. This lack of supply outweighs the drop in demand and supports higher home prices.
Good opportunities wait those willing to sell your current home with little competition from other sellers. It may take more than one week of marketing as the competition is now that buyers are distracted with the summer holidays.
And, if you are looking to trade-up or down-size; you may now be able to purchase your new home contingent on selling your current home. This has not been an option in the hyper-fast-paced market of yesterday. And, home buyers are now able to take a moment when making their decisions. You may actually come back to see the home a couple more times before making an offer. Don’t undervalue such opportunities that were blocked out in the more frenzied market.