Get Ready for Spring Home Buying Season
With families vacationing in the late summer and fall kicking off the start of another school year, April through July is affectionately known as “spring home buying season.” In fact, more than 40 percent of all housing transactions occur during these four months. Given the craziness of the real estate market over the past year, it’s no surprise that spring home buying season started early this year. Yes, it’s only March, but we are already seeing new records in both home-price growth and median listing price.
Below, we want to share some ways that both sellers and buyers can prepare for this busy season in real estate and also look at the overall impact of rising interest rates.
How Buyers and Sellers Can Prepare for Spring Home Buying Season
First, let’s consider three tips for home buyers:
Be clear when it comes to your must-haves and don’t settle for less. Low inventory and high demand will create a strong seller’s market, but it won’t be as intense as the peak in 2021.
Start your search as soon as possible! Home prices are expected to keep rising but at a slower pace.
Figure out a realistic budget and stick with it. This strategy will help you avoid home buying FOMO (fear of missing out) and panic buying — both of which can easily happen when competition is fierce.
Now, let’s shift gears and focus on how sellers can prepare:
Work with a real estate professional who understands your local market. As always, some areas will be stronger or weaker than others.
When you determine a listing price with your real estate agent, make sure you’re happy with it. There will be a smaller likelihood of bidding wars to drive it up.
Repairs and renovations are taking longer to complete due to labor availability and supply shortages, so plan accordingly!
How Rising Interest Rates Will Influence the Real Estate Market This Spring
Don’t worry, home buyers — we’ve got some good news too! We asked Michael Dean, Originating Branch Manager at CrossCountry Mortgage, LLC, if higher mortgage rates would influence the spring home buying season, and he anticipates some much-needed relief for buyers.
“We’ve all seen what the lower interest rates have done to housing demand over the last two years. One of my customers told me a story of an open house they attended,” he shares. “They described the line to attend as being wrapped around the entire cul-de-sac and estimated about 150 people were there.”
“When she made her offer, it was just 1 of 73 other offers. Each offer was made by a family who wanted to purchase a home, all with their personal desires and goals driving them,” he adds. “It’s tough to deal with that level of competition! The winning bid was close to $75,000 over asking price with no appraisal or finance contingency.”
As home buyers become more aligned to their budget with rising rates, they speak to the market with their actions. The market naturally becomes less competitive and therefore prices are driven down.
“The relationship between interest rates and home prices is interesting,” Michael explains. “Consider the topic of rising interest rates: An increase in rate increases your housing payment, but a decrease in price lowers it too.” Take the home buyer above and look at their $75,000 over-asking offer that was needed to win. Then, compare their payment with a higher interest rate at the asking price of the home. You’ll realize that the relationship between interest rates and housing prices is inverse.
“Home buyers who understand this natural balance can go into the spring home buying season calmer and more collected. And with any luck, the market will ever so slightly shift toward their favor!” Michael says.
Let The Urban Dog Group help you with your real estate needs. Contact Christine Elias at firstname.lastname@example.org.
Join us on Saturday, March 26th for the 10th Annual Pints N’ Paws Craft Brew Festival from 1 to 6 p.m. at Sanford Avenue and 2nd Street in Downtown Historic Sanford. Bring your furry friend along too!