What is the new normal for buying and selling homes?

For anyone interested in buying and/ or selling a home, these last couple of years has been crazy. Pre-pandemic, buying and selling a house was a normal activity where you could bank on having options and having sellers willing to deal. Move into the pandemic...... everything was turned upside down! Nothing was normal, and dealing with buying was a nightmare, even if you had 100% cash. Selling your home was insane. You could list and two hours later have a signed contract for $50,000+ more than you listed, with No inspections, No appraisal!

Quickly most of us forgot what had been normal, and we moved into what most thought was a new normal. While that was happening, there was and still is a percentage of individuals waiting for the bottom to drop out of the housing market. When that happens, they will be ready to say, “I told you so.”

So what is the difference between pre-pandemic and now, late 2022? What would you call 2021 and early 2022? An outlier?

Eric Mock

Let’s go back to pre-pandemic; looking at the greater Orlando area, the median price sold in Q4 2019, $280,000 to Q3 2022, $425,000 there, has been a 51.78% increase or $145,000. One thing is clear if you waited, you missed the house and the appreciation in value! Yes, it was challenging with all the competition, bidding wars, and low-interest rates. Now that interest rates have more than doubled, competition is not as challenging, and bidding wars are few and far between. Home inventory is slowly increasing, but not by much.

Yes, the year-to-year percentage increase and home sales have also slowed. The inventory of houses on the market has increased, and depending on location and price range, you can find very nice listings. This increase was not what was expected; therefore, the values haven’t declined as much.

As you can see from the numbers above, it will take a very large correction in the market to wipe out a median price gain of almost 52%.

“So what should I do ?”

Here is what I would suggest. Look for a house that you can afford. You are likely not going to live in the house for 30 years. In 2021, the average length was 13.2 years — an increase of about three years over the last decade. Get into a house where you can afford the monthly payment. Interest rates can and will change. When interest rates go down, consider refinancing. On November 10, 2022, 30 yr fixed conventional rates were 7.08%, and on December 8, 2022, 30 yr fixed conventional rates were 6.33%2. That is a nice five-week decline. Buying now allows you to be in the game and adjust when it’s right for you. Waiting for the “right time” keeps you on the sidelines. Jumping in when everyone else is jumping in puts you back competing with 10-12 other offers, 3-4 being cash. Remember how you felt when you’d lost the 10th house to a better bid?

If you still can’t find what you are looking for, take time to improve your six basic requirements for buying a home.

1. Right credit score, minimum scores range from 560-620. The higher, the better.
2. Steady income, be ready to show a two-year track record. This will prove they can afford the monthly payment.
3. Increase your savings account. You’ll need a down payment and closing costs. It is possible to get help with these.
4. A modest debt-to-income ratio (DTI): Lenders will check to ensure you can make the monthly mortgage payment.
5. Documentation. Having the correct documents and knowing what to share is critical in this process. Find a mortgage agent that can and will help you.
6. Pre-approval. The mortgage agent will be able to assist you with this. Best to know before you find the home of your dreams and know you can afford to make an offer.

Give me a call, and I’ll be happy to help you find the right home. I’ll assist you in getting the necessary documents ready so that you will be in the best position possible to accept your offer when you make an offer.

Eric Mock, Realtor You Have Realty 407-625-1770

1. sunstats.org

2. freddiemac.com

3. themortgagereports.com