If you have buyers leaving the market it may be because they are waiting for the market to crash or waiting for home prices or interest rates to go down. Truthfully, neither is likely to happen anytime soon.
There's no question that the real estate market is red hot. Despite fierce competition, now is the perfect time for buyers to buy purchase! The housing market is seeing major gains this year, especially in Salt Lake City. Homes are appreciating faster than ever. Not looking into the market at this opportune time could hurt more than help your clients in the long run.
Even with all of this talk around the “housing bubble” bursting and fear of an impending crash like that of 2008, the market today is completely different from where it was back then. In 2006-2008, mortgage lenders were watering down lending standards, and providing loans for people with questionable credit. Lenders are more cautious now. They have tightened credit standards and as the economy continues to get back to normal from the pandemic, lenders are staying selective. A crash is highly unlikely anytime soon.
Also, to consider is how much gain homeowners have been seeing, from a financing and strategy standpoint, people are going to be less likely to let their homes go even when appreciation slows down. Since they have built up so much equity in their property already.
I hate to be the one to break the news but if your clients are waiting for prices and interest rates to lower it is honestly not in the cards anytime soon. There has been a 20% increase year over year in home prices. So the thought that prices are going to fall back to the lows from a year or two ago, is unlikely with demand being so high.
Even though rates are higher today than they were at the beginning of the pandemic, they are still fantastic when compared to rates four or five years ago. While we don’t know for certain if they will go down, we do know they will go higher in the coming months.
The federal reserve is still involved in keeping mortgage rates down, but at some point this policy could change. So, the best bet is to think that interest rates are going to be higher in the coming years and get your clients locked into the low rate of today before it’s gone.
If you have a buyer on the fence about purchasing in the summer market, send me their information. I would be happy to review their situation and advise them on a strategy that will help them be a successful buyer in today’s market.