(But that auction hall is about to empty out…)
I’ve done real estate for coming up on 20 years now, and I’ve never seen such a raucous crowd of buyers for our listings. Last year, our listings averaged 13 offers on each one, and after the bidding wars, ended up 7.7% above our listing price. That wildness ended up netting my sellers over $45,000 more in their pockets than the average realtor in Orange County.
But with the rapid rise in interest rates, that whole scenario is likely to come to anend. The auctioneer is about to go home. When interest rates increase, buyers can no longer afford their monthly mortgage payment, and they just say “The heck with it, I’ll just rent.” All of that will lower the “Demand side of the equation.” But historically, it will also affect the “Supply side.” Sellers don’t want to be left holding the bag, and so they put their homes on the market “in mass.”
All that means is that we will likely have a more balanced market, and bidding wars will become a thing of the past. Things will flatten out and become healthier.
So if you’re on the selling side, and you want to participate in this wild auction environment, you probably have another month or two left. At MOST! Six months ago, I said that if interest rates hit 4%, it would throw a bucket of cold water on this market. Well, we’re just about there! Interest rates have risen like a rocket. As I have been meeting with my sellers, I’ve been saying that “sooner is better than later”…and we are now in the process of putting their homes on the market…so that they can capture those extra tens of thousands of dollars.
Normally, I am very low key when it comes to timing. Like “there’s no pressure from us.” But I’ve been around for too long, and when I see something like this rapid rise in interest rates, I (along with most prognosticators) can see that a “BIG Shift is coming.”
If you want to sell your home before that shift, call me or text me and we’ll sit down and go over your particular situation. If it’s better for you to keep your home for many years to come, I’ll wholeheartedly recommend that to you. (I’m mostly worried for those of you who need that equity …and need it soon). As you know our hearts, we only want what’s best for you.