We are all used to hearing about how we are currently dealing with one of the biggest seller’s markets in modern history. However, it’s important to remember that the real estate market has an ebb and flow just like any other commodity market. To gain a better understanding of how home prices could be affected in the near future, let’s look at how the changing market is impacting home sellers in Flemington.
Supply and Demand
Out of all of the factors that are impacting housing prices, supply and demand seem to remain the largest contributor.
Throughout the global pandemic, we have seen both supply and demand ping pong back and forth, but supply has almost always stayed well below demand. This imbalance has buoyed prices during the entire pandemic alongside sending some property values skyrocketing.
As time has gone on, the number of houses available for sale has increased very slowly, but they have a tendency to get snatched up by the immense pool of buyers — some of which have patiently waited years for a suitable home to hit the listings. Demand is very gradually diminishing but it’s going to take some time before the demand lowers to the point of necessitating prices coming down as well.
Shifting Interest Rates
Something that has assisted in putting the brakes on the seemingly unending stream of buyers (and contributing to the changing market) has been increasing interest rates.
The Federal Reserve has raised interest rates three times in recent memory, and they are attempting to avoid any further increases. The reason increasing interest rates negatively influence the buyer pool is that it tightens guidelines from mortgage lenders. Since it becomes more difficult to get approved for a mortgage, fewer people are financially able to successfully purchase a home.
The quick and easy way of looking at this is that increasing interest rates have an immediate cooling impact on the entire real estate market. Despite losing some potential buyers, the remaining buyers have not lost any of their motivation.
Cost of Living
Besides loan interest rates and qualifications both increasing by quite a bit, the everyday cost of living has also gone up, which is adding to the changing market conditions.
It’s no secret that we are seeing escalating prices on groceries, gas, utilities, and every other little expense that quickly adds up. Where increased interest rates reduce the number of buyers because lenders are being more conservative in their lending, an upsurge in the everyday cost of living will force some buyers to completely reevaluate their capability for purchasing a home.
If nothing else, higher living expenses will lead to buyers scaling down their home-buying plans and it will send them back to the listings to start their search from square one and brave the changing market in Flemington.
Be Prepared for Aggressive Buyers
Of the buyers that are able to stick around and continue their search unimpeded, they will enter into negotiations ready to make a quick deal.
Buyers that have been around over the last few years have become familiar with bidding wars and they will be ready and willing to sweeten their offer to win you over. These buyers have experienced one of the most competitive and unforgiving real estate markets in a generation.
To complicate things for buyers even further, internet wholesalers and local investors have been making a mint by swooping in to pick up a property quickly and flip it as quickly as possible.
Your Professional Guide Through a Changing Market in Flemington
Times are uncertain right now, and it’s scaring a lot of buyers and sellers. Don’t let the shifting market conditions get the best of you! If you want professional guidance to help you navigate the changing market in Flemington, contact us today at 908-448-2770!