Real Estate Blog

Happy Memorial Day Weekend!  If you're still in town, come by and take a look at these great homes I'll be holding open this weekend.  If you're traveling, be safe!  Blessings to you as you remember loved ones that have passed.

And now, the market update!

Interest Rates
Rates, in general, have softened over the past two weeks.  Right now, you can find mortgage quotes in the range of 6.75-7.25%, depending, of course, on length of term, your financial picture and credit score.  Call a few lenders and see what they have to offer.  There can be huge differences in total loan cost (costs not including the interest rate itself).  If you need a good lender referral, let me know.
Builders are offering 2/1 buy downs right now.  There are some incredible deals available with rates starting at 3.75% for year 1, 4.75% for year 2, and 5.75% for the remaining term.  If you're looking at new builds in the suburbs, let's talk!

Supply Imbalance
The number one reason that home prices are up 6% over last year, while rates remain near recent highs is the imbalance between the number of homes available and the number of buyers for those homes.  There are still too few homes for the demand that's there - so prices have continued to rise even though rates are higher at the same time.  If you're a buyer in this market, here are two strategies to consider to make winning offers in this market:
1)  Make winning offers in competitive situations.  Before you give me the eye-roll, hear me out.  I have worked with so many buyers who are only willing to make "pretty good" offers.  They know their offer is weak in one way or the other, but they make that offer anyway and hope they get lucky.  They don't get lucky. 
Winning offers are: 
*  Offers that give the seller certainty that your deal will close; and
*  Reduce risks that the seller will need to make accommodations to you the buyer during the course of the deal; and
*  Address price correctly, given the number of other buyers making an offer.
2)  Take a look at properties that have been on the market for a while.
LOTS of sellers go to market with their home considerably overpriced.  As a realtor, I hate it when this happens (the seller says, "Tthis is the price I want, I don't care about your sales comp data").  Those homes have zero competition for buyers.  Find one that meets 80% of your needs and make a list price or discounted list price offer.  You might find a seller that's very willing to negotiate and work with you on a deal.

Overpriced - What That Means
You know in your gut when you see a home that's overpriced.  But what is that about, exactly?  "Overpriced" means too expensive for the VALUE you're offering.  Until your price and the perceived value are in alignment, your home is going to sit on the market waiting for the right price to happen.
Buyers just know when price and value are aligned.  Most of the time, the buyers have seen a number of homes and developed a good feel for the balance between quality and price.  Here's my rule of thumb for pricing:

1.  The "WOW House":  this is a home that's been completely remodeled and has mostly or all-knew components and mechanicals.  You'll walk in this home and say, "Wow".  And so will every other buyer.  If you have a WOW House, then price it at the top of the market and expect to get what you ask.
2.  The good house.  This is probably the most common offering.  The owners have taken reasonable care of their home, but they've also lived in it fully.  The kitchen might be nice, but dated, for example.  If things like kitchens, baths, flooring, paint are nice, but dated, you'll need to reflect that with a lower than perfect price.  
3.  The "ugh" house.  I've had sellers that lived in their homes as a renter might.  Just using up all the resources that a home offers without any ongoing improvements to the home.  Not a teardown, but solid bones in need of new everything.  Price it aggressively, reflecting the work to be done, and you'll sell quickly.