Fourth quarter trends, advice

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As mortgage rates cross the 6-percent threshold, home sales are cooling down significantly. And with fears of a recession looming across the national economic landscape, the real estate market appears to be firmly in what experts refer to as “correction” stage. Many professionals are emphasizing that the market is readjusting to stabilize itself from the prior madness.

Bear in mind that activity tends to naturally decelerate in the fourth quarter, making it the slowest three-month stretch of the year. With schools in session and the holidays approaching, most people will push back the selling and moving processes until the spring market returns.

There’s a misconception that people can only sell for top dollar during the spring and summer time when inventory might simply be low in a particular area. Simply put, it becomes a matter of supply and demand. Talk to a local real estate professional and research your particular area for a better understanding of when to list your home for sale, and what buyers in the area are looking for.

Experts are currently anticipating even higher rates and a further slowdown of home sales. This is causing an increased uncertainty from both sellers and buyers alike regarding what to do next. Before we do that, let’s look a the trends.

  • So as long as mortgage rates remain above 6 percent and existing homeowners are locked-in at 3 percent or below, it’s safe to presume that fewer people will be willing to move or put their homes for sale.
  • We also can safely identify that the rising mortgage rates trend will only be accelerated by inflation.
  • We know that the sale of existing homes decreased for the seventh straight month in August, according to National Association of Realtors data.
  • Simultaneously, price growth has decelerated at a record-setting pace, according to the Case-Shiller Home Price.
  • Meanwhile, permits for future residential construction fell to the lowest levels observed since June of 2020.

That being said, here are some strategies for homebuyers and sellers who are currently stuck in conflict and concern in today’s market.

Sellers, price your home realistically. An appropriately priced home will still gain buyer traction and sell. Do not hold out for top dollar; be willing to make concessions versus being stuck.

Buyers, talk to your loan officer for the best possible options available. More often now than ever, conventional loans are being tossed for FHA-routed financing to save money on interest rates.

If there’s no urgent need to buy and it’s possible to hit pause on your home search until financing becomes more affordable, then do so. However, if you are currently in a strong financial position, you may want to commit to a purchase while prices are somewhat low and buyers are at somewhat of an advantage.

Remember that as a buyer, you can always refinance your mortgage later when rates are more affordable.

Contact me at 708-583-8300 or gz@zerillorealty.com or visit my new website at zerillorealty.com.

 

 

About Giuseppe Zerillo

Giuseppe Zerillo is the managing broker and owner of Zerillo Realty Inc. He is active on many boards, serving as village trustee of Harwood Heights and corporate secretary for Casa Italia. In 2011, he received the IANU Foundation's 2011 David Award for outstanding promise in the field of real estate, and in 2012 he was honored by the Illinois State Crime Commission for his community outreach. Constantly seeking opportunities to give back, he donates to several charities and raises money for children with disabilities.

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