The real estate market has been hot since 2020, driven by low interest rates and the desire of people to cash in and relocate. In the aftermath of Covid lockdowns, civil unrest in the cities, and changes in the workplace, people were moving outward and in favor of space and lower cost – some even out of the tri- state area.
Thousands of people with the same motives caused real estate prices to skyrocket. Sellers were receiving as many as 30 offers within hours of placing their homes on the market and able to sell their homes at approximately 14-20% over their asking price.
It was a Seller’s market as Buyer’s waived inspection, appraisal, and mortgage contingencies to get into “a” property , even if it was not “the” ideal property, and drew from their 401k or lived with family/friends for months to save money for higher down payments. Post closing Buyers paid higher real estate taxes (due to the higher purchase price they paid for their home), and also picked up the cost of repairs typically shared with Sellers.
With many Buyers having already moved and interest rates having been raised, the market has slowed – a little. There are still multiple offers on many homes, and prices remain stable as the supply of homes being sold has dropped as well.
However, with higher interest rates, Buyers are no longer willing to get into bidding wars, accept properties without inspections, or accept significant physical defects. Whereas 4-6 months ago Sellers would place their property on the market and have Buyers lined up, today we are starting to see properties sit on the market for several weeks.
The exception, as always, are properties that are well priced, well kept, in a good location, and most importantly owned by a Seller willing to give a little as well. If Sellers are not willing to do so, their properties sit stagnant.
As transactions are no longer one-sided, Sellers will need to shift with the market to avoid their property becoming stale as it sits unsold.