Potential interest rate cuts may allow for buyers to take advantage of properties that have been on the market for six months or longer. This savings would allow a wave of thousands of new qualified buyers who can purchase property and who also have been watching prices on properties drop around the country.
Yes, some areas are still getting top dollar and quickly. However, the majority of the country is seeing a slow down in sales and that has led to a drop in prices. This drop is giving potential buyers more incentive to move forward, especially if the rates continue to drop. The question on everyone’s minds are, is this the drop, or is a bigger one coming?
Why Would There Be A Drop?
A drop in the real estate market is expected simply because of the cost of properties right now combined with interest rates being too high. Yes, a lowering of rates would create a new wave of qualified buyers. However, there may not be enough to cover the increased inventory meaning properties could remain on the market even longer. This slow period of sales has also occurred with new real construction booming meaning that there is even more competition for sellers than there was even a couple years ago.
A drop in prices is expected but it is not expected to be anymore than 20-30% in price. If that happens, prices would expect to recover within 5-10 years from the dip. People are in affordable mortgages which means the rate of foreclosures is not increasing enough to suggest a major dip this year, or even in the next 12 months.
How Far Could Prices Fall?
Most experts agree that home prices will not fall more than 30% and with a very good reason, investors. There are more investors now than ever before and thanks to apps and websites, people can see good deals from their phone or computer and make an offer on a property they haven’t even visited. If prices fall enough investors will not wait around for a better deal, they will jump on the properties to take advantage.
The real estate market is healthier than other areas of the economy because most properties are owned in affordable and reliable mortgages. That’s an advantage homeowners can feel comfortable about, especially if they are considering selling anytime soon. If you are not sure what to do regarding your property, it’s always best to consult a realtor.
Too Late To Sell?
Right now, prices are still inflated and demand is still strong. If you are considering selling and you think your property is ready to list, you can get near your full value for it. The key is that you have to be patient. Do not take the first offer you get and allow your realtor to manage expectations. They understand the area and know what you should expect based on your house and the location, as well as local demand.
Should You Buy?
If you are in the market to buy you should first make sure that you are prepared to do so. That means you have a solid amount saved up for a downpayment, a strong credit score and established income. If you have those things then you should take advantage of some good deals that are in the market right now.
It’s best to rely on an experienced local realtor, someone who has extensive knowledge of the neighborhoods you are looking into. This gives you several advantages as well as a great deal of helping managing expectations. Do not overlook the value of a great realtor when you are trying to make important real estate decisions.
