Competition shift is likely on the horizon
With the spring rush behind us, it’s time to turn to the long-term Real Estate Market Forecast for our region. And with the economy on such a roll (the Feds just raised the interest rates for the second time this year), the market is currently making a shift.
Main Street towns are continuing to rise in popularity. Small walking towns with restaurants and shops are sought after by buyers of all ages. This has been a known trend since 2013 and has not shifted in the least. While overall home prices are rising modestly, it is the home within walking distance to a main street or town center where I see the most interest.
Home Type/Amenity Trend:
The three bedroom, two bath ranch with a garage is the king of the hill. No matter the buyer, this is the favored home type on the market today. Because the millennial generation held off in buying their first homes, there isn’t much of a difference in the homes that first time home buyers and those purchasing their second of third house so this type of house has buyers of all generations interested.
Regarding amenities, buyers show continued interest in the shiny penny with stainless steel appliances, quartz countertops, hardwood floors and modern light fixtures. Making some improvements to modernize your home may make the difference.
Rumors say that rates will be hiked another few times in the near future, and with the economy trending upward, I believe these rumors may prove to be true. If this rate increase happens, and especially if it happens more than once, buyers won’t be able to afford the same home they could with the current lower interest rates. Affordability may take a hit as we enter late summer and fall and home buyers may have to take some time to reevaluate their finances regarding what they can afford. For home sellers, this means a dip in the market.
If you are selling, price your home appropriately. I’ve seen bidding wars on homes, even in less than optimal school districts, because the home was set up nicely and the price accurately reflected the investment. The economy is in a position today where folks can afford to buy a home, inventory is lower than the demand and rates are still very impressive. All of this means we’re still in a sellers’ market. If the rates stay stable, we should expect this brisk pace to continue into late fall.
If you are buying, keep a close eye on inventory, and be prepared to act swiftly – especially for homes located near main streets and with the amenities listed above. With interest rates likely to rise, home affordability is likely to take a hit. It’s never a good idea to buy a home that doesn’t fit your needs, but working closely with a realtor to find a great investment will help you make a swift decision and get to closing before your great find lands in another buyer’s hands. Knowing exactly what you can afford and how far you can stretch will allow you to navigate a home purchase, especially if a bidding war kicks off – an occurrence I’ve seen often of late.