Are you like many others and are wondering…
What is going on with the housing market right now?
I keep seeing prices on homes in the Summerlin market decrease and decrease and decrease.
It seems the current sellers think we are still in the same market we were in last Spring/Summer. They believe the housing market is going to continue to go up and up and up, so they price their homes higher than the Spring/Summer comps and hope someone comes along, willing to pay a premium. Well, the reason people were willing to pay a premium a few months ago and they aren’t now, is that things have changed.
- The buyers are not as prevalent which removes the competition and brings prices down. (simple supply and demand)
- The Feds just raised interest rates, making the buyer’s “buying power” a whole lot less. They cant afford as much house anymore.
- We have an election coming up and when that happens, we have uncertainty. A whole slew of things can change with legislation.
- Prices are feeling like they have reached the peak. Buyers don’t want to buy a house and pay top dollar for it. They want to think they will have equity at some point.
- Inventory is inching up, so the scarcity mindset is dwindling.
Buyers aren’t buying now because:
- Market uncertainty – the election is looming, interest rates are on the rise, and the market is at a high.
- The holidays – Every year we have a slow down this time of year, due to people not wanting to be in flux during the holidays.
- Prices seem high to them. They think they will just wait out the seller’s market and buy when things go down again.
- Without lots of competition, buyers aren’t willing to offer “over asking” on a property, or waive appraisals. Those sorts of things only happen when people feel like they won’t be able to get a house.
So, heres the deal…we have a few things all happening at once. The slow season with the holidays, coupled with an election, rising interest rates and increasing inventory – all of this is going to do a few things – lessen the number of buyers, decreasing prices on homes listed, or increase the days on market due to lower demand, and lastly, cause people to hold off until the uncertainty in the market is resolved. So, we’re basically in limbo.
For sellers, my advice is to see what happens in January. If you HAVE to sell, then price your home correctly…which may be lower than the Spring/Summer comps. Don’t get caught up in thinking your house is better than one that sold a few months ago and should sell for more. As I have said, this is a different market now.
For buyers, my advice is to really weigh the pros and cons before deciding on buying. Make sure you have all of your financials in order. Save for your down payment, speak with a lender before going to look at properties and ask them how much you would qualify for now, and also, how much you would qualify for if the rates go up again. Be sure that you would be fine financially owning that home, even if the value goes down over the next few years. Can you afford the payment? Is it located in a neighborhood you really want? Don’t bite off more than you can chew.
If you have an questions or would like to discuss this further, feel free to give me a call 702-277-7235.