I Want It All
This week’s “pop” hit is the 1989 song by Queen, “I Want It All.” This could be said about many sellers who still believe we are living in the same “world” we were living in 6 months ago and turning down offers of 3-5% lower than their asking price. Times are changing. The days of the “multiple offers” may be fading fast. A home’s average “equity” has risen from $182,000 in 2020 to around $299,000 today. That is quite a jump in equity for doing relatively nothing other than living in the house for the past four years. What your neighbor may have sold their home for in January may not necessarily be the same as what you will get for your home today as inventories are beginning to rise.
46% of homes on the market have a loan to-value of less than 50% (current mortgage amount/current value). US homeowners are “equity rich” today and have benefitted from the surge in housing prices over the past five years. While getting comparable sales in your area is a start when listing your home, the actual value of a property is what one is willing to buy it for and what one is willing to sell it for. The market appears to be changing to a “buyers” market. We are seeing more and more “contingency contracts” falling through due to not selling their current home. The question is, how motivated are you to move? Do you really want to move to a new house? If the answer is YES, and let’s say your current home rose from $400,000 to now around $700,000, and your home has been on the market for over 35 days and not selling, your current home is keeping you away from purchasing your “dream home.” Is taking an offer at $670,000 going to hurt you? It is not like you put $300,000 into the home, and you are now losing maybe $30,000 by taking the offer. I realize that we all spend money on upgrades to our current homes, and that must be factored in, as well as making mortgage payments during that period. But, I think you get the point. In the big picture, you are not losing $30,000 in this scenario; you are facilitating your ability to move to the next home.
While I project that rates will move lower over the next several months, I believe a slowing economy will place more pressure on potential buyers to sit on the sidelines, ultimately bringing prices down further.
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!
Thank you for reading this blog. I hope that the facts and insights I share provide value to you.
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Blog post date: Thursday, August 1, 2024