The housing market is a constant roller-coaster ride of ups and downs. Some people buy a house to flip it a short time later for a profit. Others buy as an investment. Still others are looking for their dream home. But whatever the reason is, it is important to ask yourself, “Is the market in my favor or not?”
This blog will give you a good idea of how to spot a shifting or changing market so that you can make an informed decision about when’s the right time to buy or sell a house.
FED rate hike was one of fastest in history and they did this to curb inflation. This means that borrowing cost is going to go up, business loans and car loans are going to go up, every type of loans are going to go up and this basically means that consumer spending will go down because everything is going to cost more. In the real estate world, this means that mortgage rates will go up as well.
Within the last few months, interest rates went up from 3.25% to 5.25%. With an increase in payments like this, it will increase a borrower’s payment from a few $100 and can go all the way up to a few $1000 for some larger loans like that. This will put the buyers on the sidelines.
Here are 4 indicators that the market is shifting:
- Less offers
The last couple of years, it’s normal to see 15 to 20 offers. Now if those numbers start to go down from say 15 to 7 down to 2 or 1, then it’s a clear sign that the market is shifting.
- No Offer date or Due date advertised
In recent years, homes were selling very fast within 7-10 days, so it’s normal to see an offer due date with the listings. Now if you start to see listings without an advertised offer date or there’s no Redfin offer deadline, or you see the listing say “call agent for offer instruction,” that means that the offers are not coming in as fast.
- Days on market
Few months ago, homes were selling for 7-10 days on the market. If that starts to creep up from 7 to 14, 21 or up to 30 days, that means we have a healthy market and it’s also a sign that the market is shifting from a seller’s market to a more balanced market.
- No more enormous overbids
In the last couple of years, it’s very common to see listings go up for a few $100, 000 or over $1 million dollars over the listing price. If you start not to see those types of overbids, and the homes are selling closer to asking, that’s a huge sign that the market is shifting.
Things are constantly changing in the real estate market. Sometimes the changes are subtle, but they’re always happening. It’s important to keep your finger on the pulse of the market and to be aware of any changes that are happening around you because buying or selling a home is one of the most important financial transactions you will make in your life. Knowing what’s happening in the marketplace can help you make more abreast decisions when it is time to buy or sell. I hope you enjoyed this blog about how to tell if the market is shifting; if you have any further questions, please don’t hesitate to contact me at firstname.lastname@example.org or 650-255-1511. Additionally, if you would like to see what homes are available for sale in the area or want to schedule a showing, please feel free to contact us anytime!