This market is hard. We hear it from agents all over. And it’s true – the past couple of years are taking a toll on real estate agents and their clients. But don’t forget, the market five years ago was equally challenging, just in a different way.
On this The Real Word, Byron and Nicole discuss factors that are impacting the current market, including rising mortgage rates, offers, and home features that boost sales prices.
Economic Housing Shock
Mortgage rates are quickly rising. Rising rates mean increased monthly mortgage payments and a steep increase in price over the life of the loan. No doubt, this is bad news for buyers.
But it’s also likely to deter sellers.
Byron and Nicole break down this fortune.com article, which explains the economic shock hitting the housing market. Yes, homebuyers will likely be discouraged by the increase in mortgage rates – which should help to cool down the market.
On the flip side, sellers will also be frustrated. The majority of homeowners are locked into the historic low mortgage rates that occurred over the past two years, whether through buying a new home or refinancing an existing mortgage. To sell an existing property and buy a new home right now means leaving behind those rates under 4%.
People who were thinking and cashing in may start to reexamine their options. Many will decide to stay where they are so they can reap the benefits of their locked-in rates. This could lead to even less inventory on the market in the coming year.
Home Competition Heats Up
For every home sold, an average of 5 offers are made, with 50% of offers coming in above list price, according to the February 2022 REALTORS® Confidence Index Survey. Agents (and their buyers) are becoming more and more frustrated in the current market, with many bids going well above list price, opting out of home inspections, and covering any difference that comes after an appraisal.
The difference between this market and the one five years ago? Right now, it’s taking five offers to get one deal. A few years ago, it was taking five meetings with a seller (or five price reductions) to get a property sold. Both markets are challenging to maneuver as an agent.
Home Features that Increase Sales Price
No matter what type of market it is, every homeowner wants to sell their home for the highest price possible. So what’s most likely to boost sales price? In this REALTOR Magazine article, researchers compiled data and listed the most valued features in a home.
But do the upgrades pay off as much as sellers want them to? Nicole and Byron give their insights into which of the following home features increase your price point:
- Double Sink Vanity
- Pot Filler
- Outdoor Kitchen