October 2022- Issue 49

There is a lot of talk these days about wildlife, as in bears. I read that the stock market is "officially" a bear market, or that it went "into bear territory."

Real estate has not been immune.

Some people are saying that the real estate market, so wild and sizzling hot just a few short months ago, is now the housing version of a "bear market." Meaning bad. Meaning you stay out of it. Meaning that it's a really bad time to buy or sell a home.

Poppycock.

That's a word meaning nonsense, and it applies here. It comes from a Dutch dialect word pappekak meaning soft dung, like the bull kind, which also applies here.

There are opportunities out there, people! Just because interest rates are up does NOT mean that you can't make the changes necessary to Love Where You Live.

This issue talks about the current market and some reasons why some opportunities come along with the pain.

xo-

p.s. - please share Harmonious Home Adventures with friends and family (everyone deserves to love where they live!). Just hit the "forward" button on your email. They can sign up here:

While you can still lock in a rate somewhere around 6.5%, as of October 18, the average 30-year fixed mortgage interest rate was 7.04%.

Ouch.

I don't claim that having to pay a big chunk of dollars more per month than a year or so ago for the same money doesn't hurt. Of course, it does.

But that doesn't mean that you're hopelessly locked out of the market.

Remember how not so very long ago it was such a seller's market that almost anything with a roof and walls sold over asking, and buyers were offering to do the seller's laundry for a year as a part of the deal?

Those days are gone - poof!

The times - they have changed.

Where buyers were victimized by sellers for much of 2021 and the beginning of 2022, the shoe is migrating to the other foot. Predictions, and experience, dictate a significantly slowing market.

While we haven't seen a precipitous (or even particularly noteworthy) decline in home prices, August did show a drop - the first this year. The fall is typically a slower time for real estate sales.

So. Prices have leveled, maybe even dipped a tad. Inventory is creeping up. Homes, even quality homes, are staying on the market longer and sometimes undergoing price reductions.

All of that is good for buyers. But it's also good for a particular type of seller.

During the craziness of the last year or so, someone looking to sell their home with an eye to buying another - either for upsizing or downsizing - was in a pickle. They couldn't sell because their chances of finding something to buy at a time and for terms they considered attractive were pretty slim.

They have many more options now. And, since prices haven't (and likely won't - at least, not anytime soon) retreated to pre-madness levels, their equity positions are much prettier than one would have predicted just a couple of years ago.

More equity means more flexibility and more options in both selling and buying.

For these people, the conditions that make it a good time to buy also make it a good time to sell. And in a situation of instant real estate karma, the concessions they may be expected to give when selling will come back to them when they buy.

(This picture is of wallpaper - isn't it gorgeous? - in one of the bedrooms at our vacation rental called Villa la Vie on Hilton Head Island, SC. The photo is by the wonderful Amber Shumake.)

Since it's a buyer's market, sellers are going to be amenable to making some concessions. Naturally, the first thing buyers think about is price. And, yes, sellers may be willing to come off of their asking price more than in another market. But there are a couple of other areas you might want to consider when mulling over what to ask for.

Repairs - Sellers might be more amenable to making or giving larger allowances for repairs, perhaps even for purely cosmetic things.

Points - Perhaps more importantly, Sellers might be willing to pay some points for you to buy down the interest rate of your loan. You should extensively explore this option with your mortgage broker and your realtor during negotiations.

As I mentioned, in this market, sellers are expected to make some concessions to clinch the sale. And that's okay, particularly if you're in a really nice equity position because of the recent bump in housing prices.

Never to be neglected if you're selling - and most especially in a buyer's market - is STAGING. Nothing will enhance the appeal of a home to a potential purchaser like staging - if it's done well and properly. (And, not to brag, but I know how to do it well and properly.)

You might be tempted to make a bunch of repairs to your property to get it ready to go on the market. Be judicious about what you choose to repair.

Painting is always a big bang-for-the-buck improvement (even though paint, itself, is nearly double in price from a couple of years ago) and can be a lot more cost-effective than, say, a complete remodel.

New flooring - read "wood" - or refinishing existing hardwood floors is a perennial favorite for buyers and has a high return on investment.

Other things to take care of are things that buyers are likely to notice - do a deep clean and make sure all pet odors are gone; make sure the front door is freshly painted or clean and shiny; weed and freshen the flower beds. Your realtor (especially if it's me) will know what should be done to ready the property for sale and what should wait until the negotiation stage.

If there is any truism in real estate, it's that the market is cyclical. Things are going to change. Rates may continue to rise, but they'll come back down at some point, as well.

Depending on your risk tolerance, creative financing such as an ARM might be worth looking at. Even without that kind of hazard, however, you can secure a mortgage now (again, think about negotiating for the seller to pay down the rate) and look forward to a time when refinancing will make a lot of sense.

The best bang for your buck is to shop and buy now, while inventory is high and the likelihood of finding the perfect home is enhanced, then refinance when rates drop. If you wait for rates to drop, competition for that perfect place will heat up.

Today's buyer's market may be a bear, but it will transform into some other creature - hopefully, a cuddlier one - before too long.

But here's the thing: no matter what the market looks like, you deserve to

Love Where You Live.

You and the right realtor - me - can make that happen. And we can do it now.

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