Obviously, the housing market is slowing down with skyrocketing interest rates, high housing prices, and inflation. However, going down a path of negativity will not help your home buyers weather the storm of this shifting market. So, let’s consider the conversations that allow your homebuyers to get their dream home, even in this market.
Marry the house, and date the rate.
Overwhelming demand is finally easing up, and inventories are rising from record low levels. Realtor.com® reports the September 2022 national inventory of active listings increased by 27 percent over last year, the most significant margin since the data was recorded. As a result, you can partner with your homebuyers to find a great home with less competition.
Once your buyers settle on a home, it’s time to discuss the elephant in the room: mortgage rates. Even though rates rose sharply in the short term, they did so from historic lows of about three percent for a conventional mortgage. So even if your buyers lock in a rate now, it is still lower than the rates of eight percent and higher from the 1980s to 2000. Better yet, your clients can always refinance in the future when rates come down.
Many first-time buyers don’t see affordable options. While this is a confusing time, buyers have more opportunities, with some of the competition opting to wait out. As a result, your clients may have more time and negotiating room with sellers when making offers. With less competition, bidding wars aren’t driving up prices above asking as they were over the past year. With little clarity on interest rate dynamics, it may be wiser to encourage buyers to act now if the right home comes along.
What does the future hold?
While we don’t have a crystal ball to predict what the future holds for the economy, historically the value of residential real estate has withstood previous recessions. The current market is unique because homeowners have accumulated record levels of equity as housing prices grew dramatically. In fact, negative home equity is close to zero. So even if a recession hits and home prices drop, the property value will not be wiped out. Additionally, mortgage rates trend downward during a recession, so opportunities to refinance loans locked in at a higher rate now will become available.
Click here for your easy guide to these three critical conversations. NOW is the time to reach out to past clients and your sphere of influence. Educate them on why this is a great time to buy a home with you!
Fathom Realty currently operates in 38 states with approximately 9,500 agents. Fathom Realty supports and nurtures agents at each stage of their careers, at Fathom, YOU matter! Fathom’s 100% commission plan with low transaction fees and no monthly fees gives agents the training and technology to serve their clients, grow their business, and keep more of their hard-earned commission dollars. Also, at Fathom, you can Cap for Life! To learn more visit fathomcareers.com.