Don't Wait For Interest Rates to Decline Before You Buy

Are you thinking about making a home purchase but are concerned about the seemingly constantly rising interest rates? Perhaps you have been listening to the news media, and all of the postulating about the impending economic downturn and likely interest rate increases by the Federal Reserve. You are afraid of getting caught in a squeeze or pinch, should things take a turn for the worse. Well, my fine readers, I am here to help dispel this mode of thinking.

Lately, I have been working with some buyers who are afraid. Afraid of what might be happening to the economic prospects of anyone buying a home in this current market. Other buyers are convinced that the residential real estate market is a mess and that the time is prime to take advantage of home sellers by uncovering distressed sales, from desperate sellers. Yes, this happens all the time and is, unfortunately, a perennial characteristic of the residential housing market - whenever there is a sense that desperation is starting to take root.

Here is the thing though - I feel that if you look closer, there is something else afoot that is not being noticed by many. looking at the housing stats for Jacksonville Florida for instance, I am noticing some interesting things. For the sake of brevity, these salient characteristics are as follows:

• Inventory is way up. The number of homes for sale in this local market more than doubled from march of 2022 to the time of this writing in November of the same year.
• Homes are selling more slowly. The average days on the market in May of 2022 were a scant 27.3 days on average. What is the average marketing time now? 44.7 days.
• What about prices? Well, this is where it gets interesting. Starting in January of this year, prices have been steadily increasing and they peaked in June of 2022 with an average sales price, city-wide, of $365,025. Since then, prices have been in decline, but interestingly, in October, prices rallied and increased from an average low of $346,990 in September to $354,950 in October.

 So, in summary, while homes are taking longer to sell, and there are more of them to choose from, we are still seeing prices move up, albeit, more slowly than before. In May 2022, homes were selling for 100.3% above list price on average. Now? They are selling at 97.3% of list. Hardly a market crash. So, if you are sitting on the sidelines, waiting for interest rates to go down, I am afraid that prices are still increasing, and the longer you wait, the fewer opportunities there will be. With a higher interest rate, you can always refinance when rates go back down. Buy the house folks. Nowish.