You’ve seen the headlines and read the blogs – it’s a tough market for homebuyers right now. Not only in the Puget Sound region but across the U.S., markets are reaching record low inventories and record high home values and sales prices. Then there’s the dreaded Federal rate hike that everyone has been talking about. All of this can be a discouraging combination; however, we're here to reassure you that you don’t need to panic.
First and foremost, the Fed increase was only upped one-quarter of a percentage point. The decision was expected and planned ahead of time, allowing markets to already price it in. “So many experts don’t see rates moving much higher in the coming weeks. The last couple of times the Fed made a move, the rates firmed up in advance of the decision, and when it happened they kind of faded…” states CNN. As many may remember, the Fed has raised rates three times since the end of 2015; and following the first hike, mortgage rates started in 2016 with a drop. CNN has also reported that, “buyers will pay [an estimated] $57 more per month compared to a year ago.” We realize that probably won’t push luxury real estate seekers out of a deal but that it might be a deterrent for those right on the edge of being able to afford a home.
Secondly, the buying season has really only just begun; and economists are expecting rates to hover around the amount they’re at now (4.20% to 4.30%) for the remainder of the year. The recent NWMLS Market Update has stated that 75 percent of listings are selling within the first 30 days on the market in King and Snohomish counties. J. Lennox Scott, chairman and CEO of John L. Scott, has said he “expects ‘sellers gridlock’ to abate this summer for sellers who are waiting to put their home on the market.” All signs point more inventory becoming available once we hit peak homebuying season. A recent article in Forbes encouraged sellers who are also buyers to “think about selling first… Consider temporary rental options, or moving in with relatives after [selling].” Easier said than done, however there is no denying that selling now with the opportunity to receive offers at 20% over list price (yes, this is really happening right now) may allow sellers time and means find their dream home; and won’t end up needing to add contingencies to offers.
If you feel ready to buy, or sell, but still want more information - please do not hesitate to contact our team to help with any and all of your real estate needs.