As we indicated in our recent blog, increasing interest rates and home prices led to the consumer behavior of increasing home sales due to buyers’ having a fear of missing out as concern grew that continued increases in mortgage rates would make it even more difficult to purchase a home. Now, we are seeing early indications that more sellers are beginning to place their homes on the market due to concern that rising interest rates will eventually reduce the number of buyers.
Why sell your home?
Picture courtesy Realtor.com
While there still is not enough affordable housing in South Florida, increased interest rates are tampering the number of available buyers seeking residential properties. Interest rates have increased to approximately 5.6%, rising quickly over the past six months. There are some sellers who are concerned that increased rates could deter buyers.
Another reason some sellers are listing their property is due, nevertheless, to fierce competition in home buying, especially for those buyers who are able to pay cash. Further, the trend is that many current sellers are retirees, or investors selling investment properties –both of whom have the flexibility of not needing to find a new home immediately.
Imbalance Still Exists
Although there is a slight increase in seller listings, it is undeniable that there still remains an imbalance of having fewer available properties to meet the demand for housing. One estimate is that that there are 10-20% more homes for sale than three months ago.
Picture courtesy Keydifferences.com
Further, while many homeowners are staying in place due to uncertainties arising from the COVID-19 pandemic, there are some who believe that once the numbers of COVID-19 eases, there may be more sellers. Others may remain in place because the cost of purchasing a new home typically means that you are paying much more for less. Others may claim to stay in place to avoid increases in real estate property taxes.
What does this mean?
Interest rates always effect the real estate market. The lack of affordable housing, coupled with challenges present by the COVID-19 pandemic also effects both supply and demand for housing. At least there is some optimism in that, albeit small, there are sellers starting to provide more housing inventory.
When you are ready, should you need assistance with a residential real estate purchase or sale, our title company, Weston Title & Escrow, Inc. is able to help you. Should you have a legal question about a potential purchase or sale, our team at Oppenheim Law is here for you as well.
From the Trenches