Bidding Wars A Thing of the Past?

Bidding goodbye?
There’s no question that the market is changing. One thing we have noticed–we haven’t seen a single bidding war on a home in more than a month! That’s a big shift from the previous quarter where we saw 20-30 offers on a home with a $10,000,000 listing price. 
As we start heading into a buyers’ market, use this as an opportunity to educate yourself about the shifting landscape. In our first story today, we discuss a report from the NAR that highlights key trends to monitor in the months to come. We found it insightful, and we think you will too.
- Ri Prasad

Expert advice for buyers

Source: Unsplash
The NAR’s Chief Economist Dr. Lawrence Yun wants you to find (and afford) the homes of their dreams. In his latest address to potential homebuyers, he outlined several key trends to keep an eye on. Here are the biggest takeaways:
  1. Buyers should rerun the numbers every week. With rates changing on a daily basis, the home they could afford last week may now be just beyond their budget today. 
  2. Expect inventory to keep lagging demand. According to Freddie Mac, we’re still short about 3,000,000 homes. Only about 1,200,000 are expected to be built next year, so it’s going to take a while to catch up. 
  3. Prices aren’t coming down. Between high inflation and low inventory, there’s little room for prices to fall this year. If you're waiting to snag a good deal, you will likely be waiting a while.
  4. Suburban homes come with the highest price tags. Home price growth outside major metro areas has outpaced downtown home price growth throughout the pandemic.
  5. Some buyers may want to consider a 5-year ARM. The average rate for a 5-year adjustable-rate mortgage is around 3.9%, considerably less than the average rate for a 30-year fixed mortgage, which is nearly 6%.

Our take

We absolutely agree with every single one of these. This advice is fantastic because it helps you set realistic expectations as buyers. This advice comes directly from the NAR itself. 

Post a Comment