For anyone trying to buy or sell a house in this past year and most of last year, your experiences were like none we’ve ever seen. In virtually every city in America, buyers competed with multiple offers for the house they wanted and sellers saw strong demand coupled with increased selling prices.
It wasn’t all that uncommon to see “better than full price” offers submitted by buyers. While those days may return, for right now we have settled down a bit.
This phenomenon was driven by the lowest mortgage interest rates in a generation, a historic shortage of housing inventory, tons of economic stimulus in the market and the natural desire to get a new house under favorable conditions. Toss in a couple of additional mysterious economic factors and the picture becomes mostly clear. Maybe.
What does this mean for buyers? Locally at least, we see new housing inventory by way of new buildings, although not enough. We also see new inventory potentially being added by retirees selling off their houses and taking on smaller accommodations like apartments.
The musical chairs concept of house buying seems to have lightened a bit because of kids being back to school and many folks back to work.
Mortgage interest rates remain historically low and will through all of 2022. As of right now locally, we are still seeing multiple offers and “above asking” price offers, just not in the volume from the past. When you contrast last summer with scenarios like 14 offers on a standard three-bedroom home in the $150,000 range to today, this is an ultra-calm market to function in.
If it’s a consolation, most real estate agents are not big fans of a super overheated market condition either. It’s 10 times more work and the same compensation.
Summary: It’s a good time to buy a house as long as you can accomplish a smooth transition from the existing home to the new home.
What does this mean for sellers? Well, sellers have been in the driver’s seat through all of this and still are. With mortgage interest rates historically low, inventory still lagging and demand still strong, if you are a seller, you are in the “catbirds” seat. While in the “catbirds” seat, you saw the market value of your property increase dramatically, you saw fewer “for sale” signs on your street and you are poised to do very well when you do place your house on the market.
Summary: It’s the perfect time to sell, but the market is still just competitive enough to expect available properties to be very presentable. I’d say, get a good home inspection, work off all minor defects and then go to market with your house. Through all of 2022 and beyond, it’s fair to expect a very positive outcome.
Of course, selling a house means having to find another one, and that may require some finesse. Tip, refer to my earlier article of “bridge loans” for some advice.
Every community depends on an orderly real estate market to make good housing options available to everyone. The real estate industry may be the only business where direct competitors must work together to make home sales possible.
I applaud the more than 500 real estate agents in Hardin County that scaled up to meet the recent challenge and the professionalism they showed working with each other.