The shutdowns caused by COVID-19 made many people realize that the home they live in was no longer the space that they needed.
Your lifestyle probably changed or your family changed size and after some retrospection, you realized that maybe the city is no longer the place that you want to call home and you would rather slow down and experience fresh country air rather than busy city life. Maybe it was not the location that you needed to change, but you realized the necessity of having a home office or some outdoor space to relax in after work.
Our stay at home during the pandemic put a magnifying glass on the deficiencies of our houses. Thankfully, there are options. If the problem you are facing is that your home is now too small, you may want to consider an addition. Most people don’t realize that the Realtor who helped you find you your home, probably already has information on a good, reliable contractor. Most agents have three or four contractors that they use on a regular basis to help their clients get their homes ready to sell.
If your lot or your house can't handle an addition, now might be the right time to move. But, is it a good time to try to buy?
You might have heard that it is a seller's market. That new homes coming on the market sell in hours for significantly more than the asking price and without any contingencies. This is still true today, but the market is definitely slowing down. More homes are coming onto the market and many buyers have decided to take a break from looking, diminishing your competition. Now is your chance to buy your dream home
The spring and summer months have seen a steady increase in inventory and a slight decrease in the number of buyers. This differential is just enough to create some leverage for astute buyers who position themselves correctly to pounce on these opportunities.
Unlike a few months ago, being a cash buyer is no longer the only option for financing. In fact, veterans are once again able to compete for homes. There are always opportunities and tools available to help you obtain a home without depleting your life savings.
Not every Realtor or lender is tuned in to these opportunities and the adjustments that have taken place. 15-20 offers on the cookie cutter home at the end of the cul-de-sac is no longer the standard. Most homes are down to a competition between two or three buyers. It requires shrewd negotiating skills by your Realtor in order to not lose out on a home or end up paying too much.
Another determining factor in whether or not you can move is what you can afford to pay. Interest rates are the rocket fuel that is driving our economy and real estate sales. Take for example a $500,000 loan at 2.875% interest. The payment is $2,070/month. With that same $500K loan at 4.5% the payment rises to $2,521/month. That is an 18% rise and a substantial increase in the cost of living.
Looking at this another way, if an individual can qualify based on monthly income for a loan payment of $3,000/month, at 2.875% they qualify for a $725,000 property. If the interest rate increases to 4.5%, they qualify for $595,000.
Clearly, rising interest rates will change the face of the real estate market. Think about how this might affect you. If you are waiting for the market to turn and prices to drop, you need to consider your buying power at this time. It is important to remember that interest rates are at an all-time low. With inflation threatening those rates, it may not be worth the risk to wait, and with the adjustment to the market that we have noticed since mid-June, it may make this the perfect moment to purchase your next home.
Jean Beatty is a licensed real estate agent in VA, MD, and DC with McEnearney Associates Realtors® in McLean, VA. If you would like more information on selling or buying in today's complex market, contact Jean at 301-641-4149 or visit her website JeanBeatty.com.
If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: InsideNoVa@mcenearney.com or call 703.549.9292.
McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreMcEnearney