Wow! Change and uncertainty continue to continue in the residential real estate world these days.
Interest rates higher than we’ve seen in decades! Houses “lingering” on the market – going unsold for days! Even weeks! Zero traffic at Sunday open houses! Sellers holding back, waiting for higher prices. Buyers holding back, waiting for lower rates. Prices going up? Going down? Going where … ?
How do we surf this wave without a big wipeout?
Well, I have a few thoughts.
Are prices going down? In absolute terms, no. Or at least not yet. If you bought your house at least 12 months ago, it would likely sell for more than you paid for it. Yes, we see a lot of price reductions on active listings these days. Most of these were likely priced aggressively, expecting the multiple-offer stampede of six months ago. And that’s no longer happening.
Will they go down? Maybe. Time will tell, but it’s unlikely – at least in our market. Supply and demand remain out of balance and that won’t change any time soon. And people keep moving to Nashville. This is still a seller’s market.
What about these interest rates? Yes, they have sorta doubled in the past couple of months, and that’s been a big shock – especially to folks who’ve never experienced anything but the ultra-low rates we’ve seen in recent years. But, over the long haul, rates in the 7% range are only medium. I got my first mortgage in 1978 at 8.9% – and that was considered a great deal. Within a year, rates had gone into double digits and didn’t go back to single digits for nearly a decade. So, are these rates too high? Meh. I’ve seen worse.
Is this a good time to sell? Of course it is. It’s not good a time to pull a price out of the air and expect to get 10 buyers scrambling to offer more than that. But, if you want or need to sell a house, price it realistically and it will sell. There is still more demand than there is supply.
Or to buy? Do you need a place to live? If so, there’s no time like the present. Yes, interest rates have changed the game, but 7% is not usury. And these days buyers have a little breathing room. You probably won’t have to make a life-changing purchase decision based on a 15-minute showing and a frantic call to your lender. So, just do it! lt’s always smarter to pay on your own mortgage than to pay rent and thereby pay someone else’s. And remember this: buy the house, date the rate. If rates drop you can refinance.