By now, you've likely seen headlines indicating a change is taking place in the real estate market, both nationally and locally. It's true. A shift is happening. But the sky is not falling. In actuality, the market appears to be stabilizing, or correcting, and that means buyers have a window of opportunity after experiencing two years of a frenzied seller's market.
Let's dig into what's really happening.
Many factors can cause a shift in the housing market, but a couple of key influences right now are inventory and mortgage rates. In May 2022, the month's supply of inventory was up 47% in Bend. New listings also increased in May, by close to 6% month over month. And while mortgage rates remain historically low, the near doubling since the beginning of the pandemic has caused some hesitation and altered budgets for some buyers.
As buyers become more hesitant with rates and as more inventory becomes available, the market begins to shift more in favor of buyers. Some sellers can wait to sell their homes, but others may already be pending on a new home or have other reasons for needing to sell quickly, which can result in price reductions. According to the MLS, price reductions of local residential listings increased by 43% in May, with an average increase in price reductions at27% from January to May of this year.
If you are in the process of reentering the market or even just contemplating whether you should, here are a few suggestions to think about.
First and most importantly, timing, rates, and other economic factors may never be perfect, but buying a home has been and still is a great long-term investment. Though home prices fluctuate up and down with the economy, over time your property will appreciate. Do you wish you would have bought in 2008/09? Do you wish you would have bought just before the pandemic began? Just about everyone can say they wish they would have bought back then, whenever "then" may have been. Prices will never be the same when you look back.
The second piece of advice is to evaluate your current situation. Are you renting and paying someone else's mortgage? Talk to a local lender to see what your options could be for buying a home and earning equity. It could be possible, but you won't know until you start the process. Maybe you own your home but are looking to downsize or upsize. Getting acomparable market analysis prepared by an expert real estate broker is your first step.
Lastly, consider reexamining your mindset regarding what kind of home you want. We all want the dream home that checks all the boxes. But retraining your brain and shortening your list of must-haves can save you a significant amount of money in the long term. Instead of looking for the perfect colors, granite counter tops and beautiful landscaping, look for the perfect lot, your ideal location, and a layout you can live with. The cosmetic stuff can always be changed, and a lot can be done yourself!
Bottom line? If you're a buyer looking to reenter the market, now is a great time. Partner with an expert who can help you capitalize on this window of opportunity.