Many potential buyers in the housing market are waiting – waiting for home prices to drop, waiting for interest rates to fall, or maybe a bit of both. Everyone wants to buy at “the bottom”, but what exactly does that look like?
What happens if / when those things DO happen?
What happens when everyone jumps off the fence at once?
Right now (unlike ~6 months ago), buyers are having their way with offers. Generous seller concessions to cover costs / prepaids / rate buydowns, etc are the status-quo, along with below-asking offers being accepted, in many instances. To counter the buyer’s market, supply is going to remain challenged for the foreseeable future. With (general) affordability issues being a problem in virtually every household, many people are hunkering down (read: staying put). To compound this, if you financed a home prior to 2022, you probably have a 2-3% interest rate, which will make it even less likely that you’ll want to buy up or down in the market. Finally, builders aren’t overbuilding, as many remember 2008 (either through their own experience, or another builder they knew, that went out of business). They don’t want to be stuck holding the bag (inventory), again.
If we do experience a significant price / rate drop, it will more than likely be coupled with a limited supply of homes. When everyone that has been waiting for “the bottom” jumps off the fence at once, it’s going to get interesting…It wouldn’t be crazy to think that it could create a boomerang back to a seller’s market, with 10 offers on a home in one day, and the winning bid being thousands of dollars over asking price.
Just like that, the “benefit” of a reduced price or rate could be wiped out by competition, and a shift back to a seller’s market.
Final thought: if rates DO drop, and you DID buy, you can always take advantage of a subsequent refinance…
If you are sitting on the fence, or waiting for the bottom, let’s discuss – your options right now may be better than you believe them to be. Contact me today, or call me at 520-488-3063
