If headlines about the cooling housing market worry you, here’s what you need to know. Buyer demand has NOT gone away, it’s just not at the intensity it has been for the past two years.
We sell houses every day, because people still get married, have children, change jobs, need to downsize, want to live closer to family, divorce and die.
There is still demand if you sell your home today. It will probably just take longer. So offer your property at the right price. Keep your emotions in check. Raise your house. Have professional photography.
In 2021 there were 526 sales. So far in 2022, we’ve had 334 sales, and that’s not counting the homes currently in escrow, or those currently under negotiation.
Yes, interest rates are higher now. But the rates over the past two years have been unprecedented. They were abandoned to stimulate the American economy. And now they are increasing to stabilize rampant inflation. Like everything we buy, the price needs to stabilize.
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Interest rates in 2006 were just under 7%. In 2000 it was around 8%. In 1987 they were 10%. And in 1980 they were 17%. This is the year I got my real estate license.
Those of us who have been selling homes for many years know that it is a constant balancing act. When rates fell below 12%, we knew real estate would boom. Those of us who have lived through those times, homeowners and real estate agents alike, know that fear and complaining is a short-sighted view. Interest rates and appreciation rates are always changing. That’s why real estate jobs are sometimes referred to as “farming.”
A real estate professional can talk to you about ways to get a lower interest rate. FHA and VA loans are acceptable and are most likely at a much lower rate if the seller bought while rates were low. And buyers and sellers can pay “points” to the lender in escrow to lower the existing rate of a conventional loan.
Slowing the rate of appreciation of homes now is a good thing. Slow, steady growth and a purchase that is not driven by a mad rush to knock everyone out will bring the real estate market to a healthy state that is not driven by haste or overthinking and waiting too long.
After all, if you already own a house and want to move to another one, the price will be more stable on what you sell AND what you buy. And if you’re looking to buy your first home, balance the fear of a higher interest rate against the rising rent you pay.
Photos: Get inside the cheapest home sold in Napa in October. This fixer-upper sold for $442,500