For anyone that’s not living underground now we are watching our market once again rapidly shift. But don’t rely on historical data on this one folks. We are in a supply driven recession. Lack of inventory and historically low interest rates have caused our current conditions. Not to mention real estate professionals and our investor partners have thrived in the previous environment. Most people I speak to on a daily basis would still love to sell or buy but here are the realities.
On the selling side you own a 500k home. You have a 3% Mortgage. You have a balance of 300k. You don’t want to sell your home and buy another 500k home with a mortgage of 300k at a 7% rate. Your mortgage is current. We live in a booming area of the southeast so you stay put. Keeping real estate values high and supply at the current record low. If you need to sell you can take advantage of the low inventory and possibly market that 3% mortgage, which most are assumable as a selling point. Homes are selling. People want to live here.
On the buying side cash is still king. Almost 30 percent of real estate transactions over the last 12 months were cash deals. So there are still a historically low number of distressed properties out there. But think about this. 12-18 months ago new listings were in bidding wars. Interest rates fluxuate dramatically less than property values. So you think you missed the boat a year ago on a 500k house that brought 550k-600k at 3% mortgage and now you can buy for 450k-475k. Or even 500k at a 7% rate. Which you can probably refinance in 12-24 months at 4-5%. You can change the rate you are paying in interest by watching the mortgage market. The extra principal you paid a year or 2 ago is there until you pay it off.
Simply put we live in a great area. With great people and a booming economy. And everyone has to have somewhere to live. So count your blessings and call me if I can ever help.