Why are sales prices rising despite rates increasing?
Why are sales prices rising despite rates increasing? This seems to be the question of the day and I figured a great blog post. Sales prices are rising because inventory is still ridiculously low. Buyers are not going to be dismayed from buying a great home even if rates hit 5%. There it is…I said it. Sorry to those of you who think that a crash is coming and they can just wait out the market. The hard truth is that the market is going to outpace you and it’s not even going to look back over its shoulder and wonder what it just ran over.
I have said it before, and I will say it again rates are still historically low. Even if they hit 5% for a period of time, they are still overall low compared to previous decades. I have listened to financial advisors and what they are saying is that despite rates going up, there is no better time than now to jump into the market. Housing inventory is not going to catch up with demand. Even if it costs more going from 4% to 5% your equity growth is going to make up for the difference in a short period of time. Keep in mind the average person is seeking a home to live in and should not be focused on instant equity but long term equity. Also,the market will adjust, but we may never see rates in the 2% range again. However, I truly believe that rates will have calmed down this same time next year as the Fed uses rates as a way to curb inflation which will surely be an even bigger issue as we go into 2023.
So if you are thinking about selling your home, and thought maybe you have missed the market or that buyers are going to stop buying because rates are going up, give me a call. I want to talk to you about the way I market real estate, the way I prepare my sellers and their homes to produce the absolute best outcome no matter what the rates are that week. I can help you understand where your sale will most likely end up and come up with a custom plan to get us there. In my latest listing I did my usual marketing & advertising but I threw in stunning professional staging and had a locally famous food truck come to feed my guests! The outcome was lots of buyers and eyes on this home resulting in multiple impressive offers being submitted. A win for all involved.
If you are a buyer, sit down with an expert and talk over the various scenarios that will help you win in a multiple offers situation. I tell my buyers not to be intimidated because their offer can be as good or better than anyone else's offer and sometimes you can gain the advantage in subtle ways when submitting an offer for a buyer. There can be more “pain points” for a seller beyond a rent back or price. Maybe a seller wants someone who will love the garden they planted by hand for 30 years or care for a tree they planted to remember their Mother. Having an agent who can tune in to these nuances can be absolutely priceless. If you are looking for an agent to help guide you through your real estate journey, get in touch with me.
