"There is too much uncertainty right now with bank failures, the economy and stock market volatility to consider buying or selling real estate."
Although the news may appear alarming, it's important to keep in mind that the media tends to prioritize sensational "If it bleeds it leads" headlines and clickbait. The failures of Silicon Valley and Signature Banks were caused by specific factors related to the technology industry and relaxed banking regulations. It's not a repeat of the 2008 crisis. In fact, the outcomes of these bank failures have had two positive effects: Firstly, the Federal Reserve only raised interest rates by a quarter point and made no commitments regarding future increases. They'll continue to monitor the economy. Secondly, mortgage rates have actually decreased as a result of the events, which benefits buyers who take advantage of lower rates and decide to make a purchase.
"Interest rates are too high. I’m going to wait until they come down."
The house you live in is not determined by interest rates alone. Marry the home, date the interest rate. Rather than following the crowd, consider taking the road less traveled. Many buyers are currently waiting for rates to drop to an arbitrary number that may or may not be achievable. It's unlikely that we'll return to the extremely low rates that were available during the pandemic, and the downside of low rates was that buyers often had to make drastic concessions just to secure a home, such as waiving contingencies, forgoing appraisals, accepting homes in poor condition, and agreeing to let sellers stay in the property after closing, all while paying significantly over the asking price.
In the long run, things tend to even out. It may be preferable to make an offer in a less chaotic market, where you may have more negotiating power with the seller in terms of finding a more equitable agreement. Additionally, interest rate buydowns can be negotiated with the seller to reduce your monthly mortgage payment. It would be beneficial to discuss this option with your lender and create an offer that reflects it.
Price"s are going to go down much more. I don’t want to overpay."
The current market continues to experience a shortage of available properties. Although prices for some properties have been adjusted, we're not losing the progress made over the past three years. Properties that are overpriced due to their condition or location, or that require significant repairs and don't show well, are the ones being subjected to price reductions. However, I have observed that when a property is priced correctly, it may actually result in multiple offers.
"It is costing more to buy due to interest rates now, therefore sellers need to come way down on their price if I make an offer."
While I understand the added expenses associated with a mortgage payment, it's worth noting that sellers are pricing their homes based on recent sales, active listings, and under-contract properties in the neighborhood. Prices have softened a bit compared to last year, and are not increasing as rapidly as before. Sellers are aware that their home may not sell within hours of being listed, and are generally willing to negotiate within reason.
During negotiations, it's important to focus not only on the purchase price, but also on your monthly payment. There are ways to work with the seller to obtain concessions on an interest rate buydown, closing costs, and prepaids, which can lower your monthly mortgage payment and reduce out-of-pocket expenses, making the home more affordable.
"The market is too competitive. We will just keep renting, because it is cheaper than owning and we don’t have to deal with all the hassles."
As agents, we empathize with buyers who are repeatedly losing out on offers and feeling defeated. However, your lender can provide a detailed analysis of rent vs. buy scenarios, factoring in your downpayment and loan options, to illustrate the money you could be throwing away on rent. Seeing this comparison on paper can make the decision clearer.
By renting, you are missing the opportunity to build equity while prices continue to rise. This cycle will continue until you take action. Do you want to keep paying someone else for the privilege of living in a home that may not meet your needs, and where you have limited control? Renting may be convenient until a problem arises, such as a leaky roof or plumbing issue, and your landlord may not take care of it to your satisfaction.
Each time you pass up a property because of your lease, you risk missing out on a good deal. Buying a home is not without its challenges, but once it's done, you'll be glad you took the leap.
Give me a call, lets chat about the uncertainty you're feeling and maybe I can help ease your mind. 239-994-3681
