This past weekend we saw a dramatic change in the Triangle Raleigh real estate market it appears that the home-buying frenzy that's been going on for the past two years may have softened up just a
Dramatic Change ion TRIANGLE Real Estate Market!
Dated: May 11 2022
This past weekend we saw a dramatic change in the Triangle Raleigh real estate market it appears that the home-buying frenzy that's been going on for the past two years may have softened up just a little little bit which is a very good thing if you're a home buyer.
I am going to tell you all about what all of this means for you if you're in the market to buy or sell a home and give you some practical tips on how to navigate this crazy New Normal that were experiencing.
We're now seeing homes in the $200K- $500K price range that used to sell in a matter of days take a little bit longer to be on the market, in fact homes in the $700K to $800K price range are selling the fastest of any of the homes in the Triangle with $800K -$900,000 house selling just about the same as homes in the $400K to $500 range.
This is absolutely unheard of! We spoke with a builder's representative in Wake Forest over the weekend and they say they're experiencing a noticeable reduction in foot traffic into their neighborhood in Fuquay Varina.
Another Builder representative with a different company told us over the weekend that they released four or five homes for sale to be purchased and a couple of them got 0 bids which is extremely surprising. These homes are all in the $400K to $650K price range for both builders. This is a complete reverse of what we saw in the market even a few weeks ago. This goes to show you that were definitely experiencing a slowdown impacted by the higher interest rates and it appears that the price points that are mostly affected by this are the ones where you're going to see your first time and take your time home buyers.
Homes in $300K to $550K price range are still selling even in that coming soon face when people aren't allowed to actually go in the homes they are allowed to buy them sight unseen based on the photos and maybe the video or virtual tour of the home, but generally the homes that used to be good enough are now getting passed over for those homes that are really great and look really really good.
So what is causing all of this slowdown? Well, home buyers would have been beaten up by the market the last couple years, would have had to put in multiple offers on homes, and probably not been very successful; they go visit a home and there's 15-20 people in those homes. They are just getting worn out and then hopping on top of that, the interest rates going up and up and up.
A good number of those buyers are just saying "Enough, we just got to take a break and sit on the sidelines, and kind of catch our breath".
Their equilibrium has been thrown off by the craziness of the market, and unfortunately the higher interest rates, and it's causing these people to just take a pause. The effect of all of this is you're going to have fewer buyers out looking for homes. Recently we've seen fewer showings on homes for sale and fewer homes getting multiple multiple offers and this is all happened in just the past week or so. Also I should add that the investors that were out there buying up a lot of the first time home buyer arms the $0- $400K range, are kind of sitting on the sidelines as well right now, trying to re-evaluate what they can buy and what they can invest into and turn into profit.
So if you are out shopping for a home and you were in that 0 to $500K price range, you can expect to see a little less competition, but if you are in the $550K+ category, we don't really think that this pause is going to particularly impact you very much for a couple of reasons: most people that can afford a $550K or a million-dollar home, could stand the increase in interest rates the extra payment they're going to have to be making every month.
They can stand that and whether that storm until they are able to refinance down into a lower rate so we don't really think that that price point is going to be as vulnerable as a $200K to $500K price point, as well those people that are buying a $550K+ home might probably have just recently sold their smaller home they moved out of and they're flush with cash, they've got some more money than they really anticipated having, because the market has been so strong lately, so they therefore have more money to throw into their $550K house, which would bring the cost of their mortgage down to a very manageable rate, and so therefore we don't see the $550K+ houses being particularly affected by the higher interest rates.
We don't anticipate prices are going to take a terrific tumble, maybe homes that were overpriced in anticipation of a bull market, where there was a massive run-up in prices, maybe those homes are going to need to adjust their prices down a little bit to grab some buyers and get it sold, but we really don't think prices are going to take a massive tumble from say $450K down to $300K or $350K, there's just not enough inventory out there to suggest that there's going to be an oversupply compared to the number of buyers out there.
So, bottom line, we think prices are going to be fairly steady, maybe increase a little bit over time, at least for the short-term, but not this terrific tumble that you may have suspected is going to happen with less buyers out there. Remember, in order to have a dramatic drop in prices, you've got to have more inventory available then you have buyers to buy that inventory of homes. Right now we've got the reverse, even with the higher interest rates, we've got so many more buyers out there than there are available homes to buy.
So what helpful advice can I give to the buyers and sellers out there that are in the market either buy or sell?
Well first, if you are a BUYER that does not need a mortgage or you have a sizable amount to put down, and so therefore you can weather the storm of a higher interest rate, this is really a golden opportunity for you to buy a home!
There's likely to be very much fewer buyers out there to compete for those homes so you're able to go out and find the cream-of-the-crop, find the best time for you give it a little bit of time to think it over, and then make a good offer and win the home, versus in the past, you may have been competing against 20 or 30 offers, likely now you're going to probably be competing with 5 or 6 or 7 offers, which in my mind is a lot better odds.
However, if you are a buyer that is very dependent on a mortgage and interest rates are going to impact you, I definitely recommend the first thing you do is talk to your lender to find out if you still are qualified to buy in that max budget you had, find out how much more you're going to have to be paying every month for that mortgage, and if that fits in your budget or not. The last thing you want to do is to be house poor, as we call it, where you you have a beautiful home but you can't afford to go out and have to eat ramen noodles every night we don't want that to happen for you.
The positive thing is, we are not going to see those homes selling for $50K over asking price, at least that's where things that right now.
For the home SELLERS, know that the market has definitely changed, and if your home was good enough in the past, it may not be good enough anymore. Buyers are going to be a lot pickier because they have less competition, so know that you need to have your home looking "like a model", meaning the new construction model homes that are beautifully staged and modern-looking, clean and attractive, home is going to need to look that way.
So if you have a home that you currently have on the market for sale or you're planning on putting a home on the market, know that you have to provide buyers with a very strong value, they have to be very compelled to buy your home over one of the other. In other words, sellers must go back to marketing their home as if it is 2009 or 2010 right now where homes sat on the market for a long time.
What do you need to do is make sure your home is very clean, very decluttered, it needs to be looking like a gem when someone walks into it. Strongly consider staging the home. Staging definitely makes a big difference and helps you pull stuff out of it and declutter it and make it so that people can envision themselves living in this home. Strongly consider getting a pre-inspection, so that you know what repair items are needed to be done, and maybe if there's anything really obvious to anyone, you go ahead and get that fixed. Getting a home inspection is going to tell you what's wrong with it and it's going to be able to put the buyer in a peace of mind that they're not buying a lemon. Getting professional photography, getting a professional walkthrough video done -that's going to put your home in the very best light.
And of course hire yourself a very professional, very experienced, very aggressive listing agent to get your home sold.
A very good agent is going to maximize the most value you can get for your home.
If you are considering a move either into or out of the Triangle, I would love to be your real estate agent of choice.
When Anastasija Oskina resolved to transition to real estate, she would never have anticipated the impact it would have not only to her clients’ lives but also to her as an agent. Having helped fami....