Real estate news is big this week, as the FED’s have agreed that they are done raising the rate for the immediate future, and there may be some very small adjustments moving rates down in the first quarter of 2024. This should be good for our area.
Hopes are high to see some major adjustments, but that is very unlikely. Stability is coming, and everyone is ready for it, it just will unlikely meet the hopes of consumers.
I feel very strongly that if you can get a loan and your interest rate is anywhere from 5.5% to 6% you are in a good position. Consider that if the going rate is 6.5% you may need to buy down your rate to get to 5.5% and that is the wisest way to combat the current rate.
Just this seemingly minor adjustment changes, most mortgage payments are a couple hundred bucks a month! That’s a big budget saver and will provide a lot of relief to our wallets.
In other local real estate news, rent rates are dropping. This is likely due to tenants renewing current leases and staying put, causing a large surplus of homes available for rent. Additionally, most renters turn into buyers, so the higher rates affect the cycle.
As a landlord, you may have to reduce rent and offer some credits to application fees or waive other expenses to find a tenant to occupy your rental. Also, be prepared for some possible vacancy dates, something that we generally never see here in Augusta.
If you are in the market to buy or sell, it’s time to reassess your expectations for how quickly a home will sell. Our market is still stable, but it is taking 30-75 days to sell instead of the hours it was taking in the past few years.
This brings us to a more balanced market. As a seller, you will need to be more diligent in getting your house ready to sell and be willing to price lower than you may have anticipated. Buyers are looking for and expecting a deal, since the rates have increased so rapidly, and that’s who you will need to appeal to when you sell. For most price points, we have a two to three-month supply of homes available today. As spring approaches, I expect that to jump, and if the interest rates have not been corrected yet, plan to wait on a buyer OR price below all your competition.
It feels like we are waiting on the groundhog?!
If the anticipated rate drops come early in the year, expect to see a ton of movement, but buyer and seller beware, if the rates stay until the summer, it will be a long and miserable spring.
