A Stalled Market - What It Means & What's Next?
The Valley's real estate market has been in a bit of a holding pattern lately, largely due to interest rates keeping both buyers and sellers on the sidelines. However, some upcoming changes could shake things up, and it’s important to know how they might impact your plans.
For Sellers: If you’re thinking about selling, you might be reluctant to trade your current 3% mortgage for a new one that potentially doubles your rate. That’s understandable, and it’s why we’re seeing fewer homes being listed and fewer transactions overall.
For Buyers: Elevated rates have reduced your purchasing power, making it harder to afford the home you want. But there’s good news on the horizon—the Federal Reserve is expected to cut rates in September. This could lead to a further drop in mortgage interest rates, potentially bringing them down from the current 6.5% range to something even more favorable.
What This Means for Buyers: If rates do drop, it could significantly increase your buying power. For example, a 1% drop in mortgage rates can have the same impact on your monthly payment as a 10% drop in home prices. However, there’s a catch: as rates drop, more buyers are likely to jump into the market. This increased demand could drive home prices up, so waiting for rates to drop further might mean facing more competition and higher prices.
For Sellers in Today’s Market: If you’re selling now, you’ve probably noticed fewer showings, longer times on the market, and buyers asking for more concessions. This might make the market feel unbalanced, but it’s actually what a balanced market looks like. The market is no longer skewed in favor of sellers as it often is. However, with the anticipated rate cut, buyer demand could increase, which might shorten the time your home spends on the market and reduce the number of concessions buyers ask for.
Good News on the Horizon: The market seems to have bottomed out, and there are small but positive signs that it’s starting to turn in favor of sellers again. With the potential rate cut, areas like Cave Creek, Paradise Valley, and Fountain Hills, which are already showing improvements, could see even more activity. Scottsdale and Gilbert are also on the rise. This could be the beginning of a broader recovery in the market. However, cities in the Southeast Valley, like Tempe and Chandler, and Avondale in the West Valley are still seeing some declines to the buyer's advantage - which may quickly change with rate cuts looming.
What Should You Do?
Sellers: Be patient and stay informed. The market is showing signs of improvement, and if rates do drop, you might see more buyers and better offers. However, be prepared for a bit of a wait and consider making your home as appealing as possible in the meantime.
Buyers: Now might be the time to act before competition heats up. If the Fed cuts rates, more buyers will enter the market, which could drive up prices. If you’re serious about buying, consider locking in a rate soon and take advantage of the current low competition.
In these times, having a skilled agent who can navigate the subtle shifts in the market and negotiate effectively is more valuable than ever. The market might be challenging, but with the right strategy, both buyers and sellers can still find success. I'm here to help - give me a call at 602-330-6813 and let's put a plan in place to help you reach your goals.
For Sellers: If you’re thinking about selling, you might be reluctant to trade your current 3% mortgage for a new one that potentially doubles your rate. That’s understandable, and it’s why we’re seeing fewer homes being listed and fewer transactions overall.
For Buyers: Elevated rates have reduced your purchasing power, making it harder to afford the home you want. But there’s good news on the horizon—the Federal Reserve is expected to cut rates in September. This could lead to a further drop in mortgage interest rates, potentially bringing them down from the current 6.5% range to something even more favorable.
What This Means for Buyers: If rates do drop, it could significantly increase your buying power. For example, a 1% drop in mortgage rates can have the same impact on your monthly payment as a 10% drop in home prices. However, there’s a catch: as rates drop, more buyers are likely to jump into the market. This increased demand could drive home prices up, so waiting for rates to drop further might mean facing more competition and higher prices.
For Sellers in Today’s Market: If you’re selling now, you’ve probably noticed fewer showings, longer times on the market, and buyers asking for more concessions. This might make the market feel unbalanced, but it’s actually what a balanced market looks like. The market is no longer skewed in favor of sellers as it often is. However, with the anticipated rate cut, buyer demand could increase, which might shorten the time your home spends on the market and reduce the number of concessions buyers ask for.
Good News on the Horizon: The market seems to have bottomed out, and there are small but positive signs that it’s starting to turn in favor of sellers again. With the potential rate cut, areas like Cave Creek, Paradise Valley, and Fountain Hills, which are already showing improvements, could see even more activity. Scottsdale and Gilbert are also on the rise. This could be the beginning of a broader recovery in the market. However, cities in the Southeast Valley, like Tempe and Chandler, and Avondale in the West Valley are still seeing some declines to the buyer's advantage - which may quickly change with rate cuts looming.
What Should You Do?
Sellers: Be patient and stay informed. The market is showing signs of improvement, and if rates do drop, you might see more buyers and better offers. However, be prepared for a bit of a wait and consider making your home as appealing as possible in the meantime.
Buyers: Now might be the time to act before competition heats up. If the Fed cuts rates, more buyers will enter the market, which could drive up prices. If you’re serious about buying, consider locking in a rate soon and take advantage of the current low competition.
In these times, having a skilled agent who can navigate the subtle shifts in the market and negotiate effectively is more valuable than ever. The market might be challenging, but with the right strategy, both buyers and sellers can still find success. I'm here to help - give me a call at 602-330-6813 and let's put a plan in place to help you reach your goals.
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