Published November 18, 2022

Market Changes and What That Means For You! (The Buyer) | Kelly Nicolaysen | Rick Moore Group

Written by Rick Moore

Market Changes and What That Means For You! (The Buyer) | Kelly Nicolaysen | Rick Moore Group header image.

There's no denying the swift and changing market we currently find ourselves in. Between interest rates, general inflation and the overall economic climate- change has given the illusion that everyone is stopped in their tracks. Buyer's are wrestling with higher interest rates while seller's remain hopeful for the no-contingent, high ball offers we've grown accustomed to the last 2 years.

But, a market shift is nothing new to us. The housing market ebbs and flows with what it can withstand. If you ask any Realtor, lender or anyone working directly with the market they'll tell you it's always a good time to purchase-but why buy now?

Besides the classic "build your equity" line, as interest rates rise, so does the buyer's negotiating power. The days of waiving inspection, appraisal, and bidding wars are behind us. As much as higher interest rates seem like a bummer-they're not. Like it or not, these interest rates have leveled out a heinous seller's market and put buying power back in the buyer's court.

The pros outweight the cons exponentially.

What has changed quite recently is buyers are more in control of their negotiations. Let's compare September 2019 where 78 single family residences (SFR) were sold in Bellingham. This past September the numbers jumped to 95 SFR sold. This shows us homes are still selling and frankly the smart buyers are buying.

Yes, it feels abysmal, but sellers are lowering listing prices, buying down buyer rates and covering closing costs. This coupled with the option to refinance may actually save buyers more money in the long run as compared to the last four years.

Let's be real and really break it down. The past 2-4 years has been the wild west of the housing market and we've grown accustomed to it- even accepted it for what it is. Waiving an inspection for a home you're offering 50k over for is absolutely ridiculous, but we've adapted and it became the new norm. Now change is at our door once again and change is, well, change. We either love it or we hate it.

The sun is setting on what we knew to be the housing market. Utilize the silver lining.

I encourage buyers to look at the silver lining and stop getting caught up on interest rates. The last two years of low interest rates have resulted in sky rocketed listing prices, the waiving of most, if not all contingencies and drove up bidding wars. Leaving folks at the complete mercy of the sellers. (With little option to refinance in the future since rates were already so low).

Currently, buyers are no longer mercilessly bidding with little compromise from sellers. Now is the time, negotiating power is growing and the sense of security is returning. Now is the time to have us negotiate for closing costs paid, interest rate buy-downs, and offer price. With the option to refinance in a few years, you will have thousands back in your pocket. The times of "put up or shut up" are gone for the time being- use it to your advantage.

Now IS the time, but you have to do it right. When you need someone to put things into perspective, fight for what you need and tackle negotiating for your best interests, contact us.

Now, sellers, we didn't forget about you! If you're wondering if now is a good time to sell- it most certainly is. Typical home appreciation usually peaks at an 8% increase annually. These last few years homes have seen 15-20% appreciation yearly which is a monumental return on investment even if you purchased your home just 2 years ago. As the winter months rapidly approach and the holidays grow ever closer, this is the perfect time to add your home to the dwindling inventory.

Plenty of smart buyers are still buying through these winter months. Less inventory brings less competition and more demand.With predictions of rates dipping these next 90 days, buyers this will be your window into home ownership and sellers this is your time for quicker home sales. The "wait it out" mentality doesn't usually pan out the way most folks plan, but quickly turns into the narrative of "I shouldn't have waited".