It's true that buyers in this summer's market will have a higher interest rate to contend with, but the good news is that in most cases they won't have the bidding wars pushing them tens of thousands and even hundreds of thousands above list prices. With less competition, buyers can now negotiate on inspection items, low appraisals, and more- something we haven't seen since the start of the pandemic. (In good news for buyers, interest rates have actually come down from the highs we saw a couple weeks ago so this is a good time to make a move if you are in the market.)
Buyers can also consider using some of the money they may have had to use in bidding wars earlier in the year to buy down higher interest rates now for more favorable loan terms. Speak to your lender about this but there may be some opportunities to get more value from a point buy-down right now than usual. Or even better, negotiate for the seller to buy the points down for you ;)
While some homes continue to get multiple offers (typically the ones that are in the best locations, condition, and are prepared the most thoughtfully for sale), for other good homes, buyers are getting a discount, often slightly under list price. It's much less common for buyers to need to waive their inspection rights or offer appraisal gap coverage. There are a lot of really nice homes out there waiting to be snatched up.
Our message to buyers- don't try to time the market and wait for rates to go down or prices to drop. These things, if they do happen, won't do so in a way that you'll be able to recognize in the moment. It is often only in hindsight that you can ever really see that an opportunity like that presented itself. The high percentage play is- when you find the right home go ahead and do what it takes to get it. History has shown us that much more often than not, that has proven to be a wise move. Timing the market leads to uncertainty and in most cases, it just serves to slow you down, rather than result in some advantage gained. If you capitalize on this market shift and make the most of it- you will probably be glad you jumped in!
Our message to sellers- this is the market in which your home needs to shine. No cutting corners- put the extra effort into improving the condition of your home, go the extra mile in preparation and maintenance before selling, clean, stage and, Lord, please get professional photography of your home. Your listing needs to be the clear winner in comparison to the competition in order to attract a buyer willing to make you an attractive offer. If you have a home you are considering listing, there is still a very healthy amount of buyer demand to take advantage of.
As always, feel free to reach out with questions. We are here to help!