As the market begins to normalize, sellers will need to become more realistic in their pricing expectations. With low inventory, stricter lending regulations limiting buyers’ options, and higher interest rates, it is essential that homes are priced correctly from the start — otherwise they may see multiple days on the market or have to lower prices down the line. This phenomenon can already be observed across Stillwater: out of 23 active listings, 15 had undergone price decreases at least once!
Mortgage rates have seen an unprecedented jump in the past year, with economists expecting them to remain above 6% for some time. However, it’s not all bad news; many are predicting a return to a historically low 5% by 2023 – so you may still be able to secure favorable terms over then next few years if you act fast! Unfortunately, 3’s will likely be out of reach (at least for now) as we don’t expect such record lows anytime soon.
Despite some recovery in the housing market, we won’t be seeing a dramatic surge of inventory anytime soon. With many homeowners still enjoying their low-interest rates from purchases made during and after the housing bubble/crash, people are doing what they can to maintain these cost-effective benefits. As such, builders have adopted more conservative methods when it comes to expanding current inventories.
With low inventory persisting, the current Twin Cities market is closer to a more balanced state than what one may consider as a buyer’s market. However, in order for it to hold true, we would need at least six months of supply – something that hasn’t been seen since 2012! Due to some recent changes such as high-interest rates and fewer buyers entering into the pool, there are now better opportunities for negotiation on inspections and closing costs. All this enables potential homebuyers with a bit more bargaining power during their house hunt process!
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