WEATHERING THE STORM…
“Is anything selling right now?” That’s the question I get most often these days. Articles about how the Seattle market is the fastest cooling real estate market in the country, or how rising mortgage rates are tanking the housing market have created the impression that the real estate market has completely ground to a halt. Not so fast.
For some context, ours is among the fastest cooling markets in the country partially because it’s been one of the highest flyers for most of the past 10 years. Nothing lasts forever. And it’s true that mortgage interest rates, currently hovering around 7%, have taken a serious bite out of demand and thus prices. But even with these headwinds 535 single family houses were sold across the Eastside last month, 229 of them for more than $1.5 million. In Seattle 529 single family homes sold last month, 217 of them for more than $1 million. While these totals are obviously down from a year ago, plenty of deals are still getting done. To paraphrase Mark Twain, rumors of the real estate market’s demise have been greatly exaggerated!
Now for the solutions part of the program. While today’s buyers might experience some sticker shock looking at their estimated monthly payments vs. 6 months ago, in some good news for buyers, lower prices mean that they can get more house for their money today than they could earlier in the year. The trick is being able to afford the higher payments until interest rates moderate.
Enter the always resourceful mortgage lenders who have come up with some creative programs to try to tide buyers over to a time with more agreeable rates. Traditional “buydowns” let a buyer pay mortgage points upfront in exchange for a lower interest rate. Today’s twist on the buydown has the SELLER pay the points for the buyer, earning the buyer a lower interest rate for a period of 1-3 years at the beginning of the loan period, depending on the specific program. After this initial period the loan reverts to its original interest rate. There are limits on loan size and other restrictions associated with these programs and I’d be happy to introduce you to some smart and resourceful lenders who can take you through all the details on these and other creative loan options. I can also walk you through how and why a seller might happily pay the buydown points! The key is that buyers who can use creative loan options, bigger down payments, etc. to lessen their payment pain for the next few years will find more properties to choose from today than at any time in recent years and can come away with more house than they would have 6 or 12 months ago.
Sellers should know that motivated buyers are still out there. Well priced and marketed listings are still selling and, in some cases, they are selling with multiple offers and above their asking price. It can be done!
Operators are standing by. Let me know how I can help.
Rip.
