Much like Saturdays in Davis Wade when that third quarter clock of 2023 ran out, we reached for our phones, turned on our flashlights, cranked up some Journey and went to work! October breathes fresh optimism, and more importantly, opportunity in the realm of real estate that allows us all to finish strong…if we are dialed in!
WHAT WE KNOW…
Interest rates aren’t revisiting the days of 2% anytime soon. Unless, of course, that is part of your home buying strategy. (More on that later!)
While highER, interest rates aren’t actually high, comparatively speaking. Interest rates are competitive, and when compared to many historical rates, they are actually still quite low.
Inventory remains low. According to Goldman Sachs, 99% of borrowers have a mortgage rate lower than the current market rate. Few sellers are choosing to voluntarily move and sacrifice their low interest rate. Instead, many are opting to stay put and improve.
In our market, new construction continues. Our newer developments have steadily grown and there is no indication that will stop any time soon. While the cost of construction remains high, experienced Buyers are frequently choosing less square footage, a more curated home and community amenities (like a swimming pool) over the builder beige McMansion era.
OPPORTUNITY KNOCKS…
What does this mean for our real estate market? Well, quite simply put…Opportunity is knocking!
- Less Competition. There is notably less competition in the market…on both sides! Buyers have fewer options to choose from, but are also less likely to be in multiple offer situations than even just six months ago. This means you may not have to utilize escalation clauses or offer above asking just to have your offer considered. You also may not have to waive valuable contingencies like inspection or appraisal, which have long been considered standard contract terms.
- Homes Coming to Market for the First Time. While first time homebuyers may not have the ability to extend for the cost of new construction, they likely have the opportunity to step into a larger home in an existing neighborhood as we continue to see Sellers relocating to their new custom homes. Many homes are coming to market for the first time for this very reason.
- Buyer Incentives Available. Because the Buyer pool is limited, many sellers are willing to offer Buyer incentives. For Buyers, 4th quarter is your sign to craft your purchase strategy to use such incentives for your benefit for items such as seller paid closing costs or even an interest rate buy down! Save your cash for those improvements you’ve wanted to make and utilize seller incentives for things that will benefit you in the long game.
- Serious Buyers. Fortunately for Sellers, the Buyers that are in the market during 4th quarter are rarely tire kickers. They are serious, well qualified, and ready to make decisions. The holidays bring new motivations for getting settled in that new home and when Buyers come to the table in the last quarter of the year, they are typically ready to make something happen.
- Reduced Market Time. Sellers are less likely to be competing against EVERYONE. With limited inventory, Buyers truly have less options to see. As a Seller, bringing your house to market means you are prepared to move…NOW. The potential for a Buyer to materialize in a very short window is very HIGH if your home is priced properly and well maintained. With higher prices and higher interest rates, Buyers are less likely to overpay for homes or have the ability to use their cash for deferred maintenance items.
HOW TO WIN…
Capitalizing on 4th quarter opportunities is really quite simple. Here are a few key components to accomplishing your goals before the clock strikes midnight:
Buyers:
- Choose your agent wisely. Find an agent whose personality aligns with yours and experience matches your needs. Make sure they are prepared to design your purchase strategy with you and execute the same.
- Get Prequalified. Know your Buying power and be prepared to share this knowledge with your Seller.
- Know your strategy. What is important to you? What are your non-negotiables? What does your financial position require?
Sellers:
- Choose your agent wisely. Find an agent whose personality aligns with yours and experience matches your needs. Ensure their marketing and pricing strategy are well crafted and they are prepared to execute.
- Be realistic in pricing. Buyers are turned off by greedy sellers, seeking to capitalize on all time highs. Buyers will, however, respond to pricing that reflects the market.
- Perform all deferred maintenance. Buyers have a discerning eye with higher prices and interest rates.
- Know where you are headed. With the proper strategies in place, you may have to move quickly.
BOTTOM LINE…
“Love where you live.” We subscribe to that sentiment wholeheartedly. Don’t let the challenges of the current real estate market make you stagnant in moving towards your real estate goals. Rather, reframe these challenges as opportunities and develop a well-crafted strategy to accomplish these goals. We’re here to help…and we’d love to get to know you! Drop us a line and let us know how we can help!
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