The State Of The Market: When the pandemic first hit, it almost instantly triggered a backlog of buyers eager to bid on homes left and right, therefore driving up prices in the face of soaring demand, fewer listings, and impressively low interest rates. But despite the fast-paced, record-breaking seller’s market we’ve seen for the past two years, it seems that the days of bidding wars and lightning-speed closings are behind us.

So — what do the latest reports tell us? That inventory is accumulating while buyer demand is abating (thanks to surging mortgage rates and inflation), leading to a longer stretch of time on the market for listings.

With mortgage rates increasing from 3% to 6.2% between January and June, the market has undeniably cooled. The result? A growing supply of housing inventory and a downward trend in sales prices as demand slows due to rising mortgage rates and inflation. When a housing market cools, it doesn’t mean that home prices are plummeting, but rather that they’re building at a slower rate. While inventory is still low, comparatively speaking, less demand also means less competition for buyers.

In addition, it means that (contrary to popular belief) now could be the optimal time to purchase in a market that is sideways and looking for some much-needed direction.

In the past, we’ve seen markets hit what we call a “lull” and then shoot upward six months later as rates trend back downward. Of course, we don’t have a crystal ball to look into, but historically, Washington, DC has always remained a sound market — even during periods of recession. Yes, a large amount of buyers have stalled their searches after evaluating what their new monthly payment would be with interest rates today. However, the reality is that these buyers will be back, and with them, another surge in demand is likely to follow.

So — what can you do to make meaningful moves in the meantime? Together, we can help you negotiate the best price for a home in today’s market and source a sensible monthly rate — without compromising on your expectations or budget. Here’s how:

• By making lower offers on homes that have been sitting on the market at high prices. We are making offers equivalent to prices seen in the fall of 2021.
• By successfully negotiating for closing cost credits, thus off-setting the purchaser’s cash close.
• By shopping lenders…A lender we work with everyday just offered our clients 3.8% on a 7/1 ARM and 4.3% on a 30 year jumbo.
• By empowering our buyers to conduct normal home inspections, compelling sellers to make repairs and saving more.
• By changing the narrative.

Just think: If rates tick back down 1% a year from now, most of these buyers will just refinance to lower their monthly payment even more, with some clients saving up to $700 a month depending upon the sales price. One of our agents, Marc Ross, has personally benefited from this strategy in the past. According to Marc, he bought a home at the end of 2019 when rates were around 4%, and he landed at 3.7% for a jumbo mortgage. A year later, the markets were volatile during the China talks, and rates dipped down to around 3%. He went on to further refinance at 2.8%, saving him approximately $650 a month!

Moral of the story? Don’t miss out on opportunity. It’s impossible to time the market. Make the monthly payment work for you today and you will likely win in the long run.

Craving results like the ones Marc achieved? Get in touch with our qualified team of real estate experts today.

Ready for a crash course in mortgages? Check out our post on Everything To Know About Mortgages Today to learn the basics.