Can You Feel It
This week’s “pop” hit is the March of 1980 hit “Can You Feel It” by The Jackson 5. The song talks about feeling the change, and other than the weather changing, we are beginning to feel the change in the real estate market, going from the 3+ year “sellers” market to a “buyers” market. Sales in the metro ATL are currently down 6.2% as compared to last year, and housing prices are no longer rising at a double-digit pace as they have for the past several years. Housing prices are only up 2.5% on a year over year basis through September and may even finish “flat” by the end of the year. Average time on the market has gone from just a couple of weeks to 45-60 days, and we are seeing more and more sellers now contributing to closing costs, which was pretty much only done by builders on new construction up until now.
The fact that we are now seeing sellers begin to pay towards closing costs, prices remaining steady to possibly falling, and rates getting below 7% again and possibly moving closer to 6% means we have the signs of the market turning into a buyers’ market once again.
One of the biggest barriers for potential buyers (especially first-time buyers) over the past several years really has not been being able to qualify from an income and or credit perspective, despite the higher rates, but cash to close. Since sellers did not have to help in this area until recently, the first-timers were basically shut out of the home buying process due to downpayment + closing cost requirements, which in many cases was in excess of 7% of the purchase price. The “first-time” homebuyers are the catalyst to a healthy housing market as they, for the most part, purchase the lower priced homes, enabling the seller to “move up” to their next home, and hence, the process begins, which translates into a healthy housing market. It would be great if FNMA, FHLMC, and HUD would simply take down payment requirements to no money down for first-time home buyers, but that would make way too much sense and would cost the taxpayers nothing as opposed to “grants” or other assistance programs that not everyone qualifies for… even being a first-time homebuyer…but I digress. The fact that sellers are now beginning to pay sometimes 2% to 3% of the purchase price towards closing cost could save a buyer possibly $10K to $15K on a home valued in the 500K range. That is real money and certainly an incentive for potential home buyers in the coming months. I am not only seeing this change in the first-time homebuyer market, but I am also seeing it in the higher price ranges as well.
You may be feeling the weather begin to change, but you may also be feeling a real change in the housing market. Stable to possibly declining sales prices, possible reduced cash to close at closing, and possibly lower rates equal a much better housing market.
Remember… the BEST RATE… IS A LOCKED RATE… with a float down… ask me about our program that allows you to lock your rate and then float down if rates move lower.
Make sure you (or your buyer) get pre-approved before looking at homes so we can determine if you are looking in the correct price range and have you armed to submit an offer with a pre-approval letter!
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Blog post date: Thursday, October 17, 2024
