Demand in the housing market is at the highest levels in years, and real estate agents are helping clients navigate the competition. This is true whether their clients are buyers or sellers, because each may face unique hurdles that they may not have had to deal with before.
It should come as no surprise to any agent that the dynamics in the housing market today are starkly different from what they were even a year ago, but it might take some extra effort to adapt to current conditions. Home prices keep going up, and that’s a trend that’s expected to continue for some time to come, according to the latest Case-Shiller national home price index. Moreover, prices aren’t just rising, they’re also rising more quickly than they did in the recent past, thanks to buyer enthusiasm at the start of the spring buying season.
What do these conditions mean?
The rising cost of buying a home creates some unfamiliar situations for agents. Buyers now have to contend with higher prices and mortgage rates that have risen in the past several months, resulting in additional costs that could stretch into the tens of thousands of dollars over the life of a loan. On the other hand, some buyers are willing to take the additional hit, thanks to the improving economy. This may be particularly true of first-time buyers who are eager to get into the market.
But many current homeowners may not want to sell, due to rising mortgage rates. Many locked in extremely affordable terms with refinances in the wake of the recession, when rates fell into the range of 3.25 percent. Those historically beneficial rates could combine with concerns about buying in this hyper-competitive market to keep owners in their homes despite the huge demand they’re likely to encounter as they sell their own properties.
These are serious issues for agents to consider as they try to help clients through the real estate sales process. Consequently, it’s a good idea to reassure clients that today’s conditions are still fairly affordable in comparison with historical norms, and action as soon as possible will help them lock in better deals than they’re likely to face even a few months from now.
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