Once upon a time, just a couple of months ago, rates were going up.... but we could call around and figure that we were all in the same boat.
AND THEN, all of the sudden, I'm higher than some online lenders. :( What the heck!!??? We're typically pretty darn close, give or take a little. But the last month or so, it's been painful to match their rates- ouch! We're still beating most local lenders.. .but it about gives me a heart attack to see the rates offered by some online lenders. So what's happening?
Well.... those bigger lenders who have lots of traffic and advertise online can "manage their traffic" with their interest rates. So when it's slow, they lower their rates so that they can get more business and not have to lay anyone off. It's just a first quarter of the year problem, and that's how they manage it. And then when they get behind and too busy... they raise their rates a little higher to slow down traffic. It's hard for the little guy to compete during the first quarter- but we're doing what we can to be as competitive as possible, and we know that our stellar service and reputation for excellence is certainly worth something as well.
So the big variations that you're seeing now doesn't mean that your favorite local lender isn't staying competitive; it's just that the bigger lenders are "managing traffic".
As rates continue to rise, we'll all have to be tightening our belts up.. .because things are going to be getting more and more competitive. So we're tightening our belts a little more starting today- to help compete with the online lenders... and because we know it's coming anyway. That means that we are going to be relying more and more on volume, and we're ready for it....
EXCEPT.... our average sales price here in Colorado Springs has been $250k or so.... We have about 1,200 single family homes listed for sale---- about 75% of which are new construction--- and only about 25% of those listings are under $400,000. So we literally have about 1 house for every 1,000 households listed for under $400,000. It's insane. I've been doing this for decades, and I've never seen anything like it. It's so competitive that cash is taking a ton of those... It's looking dire.
So what the heck are we to do???? Cozy up with builders. Find investment property owners who are interested in selling to their renters already living in the property. Co-market with listing agents.... What are your ideas? I know the whole country is facing this dilima to some extent. How are you and your lenders handling our current market conditions?
Spring is on it's way! We're looking forward to a busy year! But we've got to be dynamic and willing to make some changes in the way we do business if we're going to make it happen. :)