I talked with a lender today who called the market “squirrel-ly” and I thought that was a perfect analogy. You’ve seen these little guys trying to decide whether or not to cross the road, darting around looking terrified. Well, that’s kind of us these days, and justifiably so. HOWEVER. You know there’s always an ‘HOWEVER’ if you talk to me. Here it is: Real estate is local. That’s 1001 times I’ve written that. But it’s true and it’s important. So the however leads to: It’s not time to run and hide in a cave.
Yes the rates have gone up, but you can be sure that lenders are working on ways to make it so that you can get into that home you want. Are some folks going to fall out of the running temporarily? Yes, but they should not give up. There will be ways.
Meanwhile, remember that here in our market in the Raleigh NC area (the Triangle), we were the last ones to fall when the market crashed back in 08. And we were the first ones to start lifting off of the bottom as well. Why? Because of demand. Supply and demand is a huge factor in real estate and here, demand is crushing. So…why is the market feeling slow right now? I call it the holiday doldrums. If you’ve ever been sailing and struck by the doldrums on a hot summer day, you know it’s excruciating. You sit there, bobbing in the middle of the river or waterway or ocean, praying for just a little breeze. But you get crickets. Well we’re having the ‘between Memorial Day and July Fourth’ doldrums. Think about it. This happens every year. People are thinking about vacation, graduation, vacation, vacation, vacation.
So what do we do when it happens while rates are climbing the ladder in ADDITION to vacation? Well, we pay attention! We most DEFINITELY have some of that hitting out market right now, because a little bit of rate hike can equate to enough increase in house payment that some buyers have to tap out for a little while. Buyers are scared right now, because of the unpredictability they face. So caution is the order of the day. What do you do? TALK TO YOUR LENDER. Your lender is going to be your financial guide all the way. And if you’re close to the edge, maybe waiting is the way to go. Or ask about some other loan program that might work better for you.
But for sellers? Don’t panic. Bob around in the river or ocean and ride out the doldrums. I promise after the 4th things will pick up. Look, we’ve had vacation, graduations, more vacations coming…people are distracted from home buying. Yeah, if it makes you feel better, lower your price and test the results. Chances are, you won’t see a difference. I am telling you, it’s this way every year.
What is GOOD that’s happening now is that buyers have a bit of breathing room from the race to multiple offers, and they have a break from excessively high due diligence fees, in some cases. No way that’s a bad thing. And IF the market continues to stand still or slide, then we’re going to see the needle swing away from a strong seller market to something favoring buyers more. And remember ideally, the needle stands straight up between buyer advantage and seller advantage, to something more reasonable for everyone. I guess whether or not you agree with that statement depends on whether you’re a buyer or seller, or neither. But a fair market is better; trust me on that one.
For now, there’s a change in the weather with regard to real estate and it’s way too soon to jump ship (unless you need to cool off). We will surely see some buyers fall out of the race for now and we will see some homes sitting on the market longer…for now. We still have the huge corporations either here, or coming here, and people need housing. And we have the aircraft manufacturer coming to Wake Forest too. So demand is still crushing our supply. The market may ‘fall’, but remember we’ve been in an abnormal market for a long time. What we might be seeing is a normal market coming into view.
Just remember that this is a time for creative problem solving and a time to reestablish patience in the real estate process. Homes will still sell; buyers will still find a house, people will still be able to live.