It Costs HOW MUCH?!
Only a few, short months ago the refrain coming from excited homeowners was, “I can’t afford NOT to sell my house.” Remember? The prices were absolutely stratospheric across markets, regions, and socio-economic quadrants. It would seem, though, that what we’re hearing now is pretty much the opposite: “I can’t afford to sell my house.” If they do sell, where are they going to go? What can they legitimately afford? Whiplash, anyone?
The What
You can slice this up any way you see fit, really. We looked at several sources to make a determination about the most impactful criteria homeowners are dealing with in today’s market. The struggle is real, the TikTok experts’ seminal advice, notwithstanding. The barrier to entry boils down to price. The cost for single-family homes (and apartment, condos, townhouses, and multi-family units, etc.) has quickly outpaced what people can afford. Is it the economy’s nosedive? Is it too much inventory that didn’t sell during the boom? Is it stagnant wages, the war in Ukraine, or insurance costs, or ‘you name the reason and you’re probably correct’?
The When
Tabitha Mazzara, director of operations at Mortgage Bank of California, says don’t wait (www.forbes.com). Prices aren’t likely to drop dramatically at the exact moment you think you’re going to be ready to buy. “If you’re waiting for prices to suddenly plummet to what they were in the past, you’re making a mistake.” Honestly, if you need a home, don’t want to rent, and are ready to pull the trigger, just do it. The search for something you can afford/love/learn to love might be a little tricky – and lengthy – but time is of the essence. Right now, there is a very large percentage of home seekers literally between a rock (no inventory they can afford) and a hard place (the interest rate monster). Says Tabitha, “The Fed has promised another interest rate boost. If you’re ready to buy, don’t wait because prices aren’t headed dramatically downwards to what our parents paid. Things might dip a bit, but there’s no cliff dive that’s going to happen.”
Conclusion
Naturally, a homeowner/home seeker is only going to be able to do/afford what they can. As a real estate professional, you’re no doubt being overrun with calls and emails and texts from prospects in this very same, and very real boat. As always, it’s a bad look to start working with a client who isn’t verified and cross-checked. They need to know precisely what they can afford, yes. But they also need to be approved and they need to understand that you all could be in this for the long haul. Take a breath, ensure open channels of communication, and maybe a little yoga to smooth out the road. They’ll find a home, they’ll think you’re a superstar, and you can move on to the next home seeker in need.
Research:
https://www.forbes.com/advisor/mortgages/real-estate/housing-market-predictions
https://myhome.freddiemac.com/resources/calculators/how-much-can-you-afford
