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There’s no question that rising interest rates are weighing down home sales. Year-to-date, the shift in affordability has had a greater impact on the single-family home market, with sales down 34.4% from a year ago. Condo market sales are down 19.3%.
With new listing inventory still low, the median sales price has remained relatively flat over the last several months. The single-family home median price was $1,100,000 last month while the condo median price was $502,500.
Properties are spending more time on the market. The median days on market for single-family homes rose to 18 days, compared to 9 days in September 2021, and condos marked 14 days in September, compared to 11 days during the same period last year. Although active inventory has increased due to spending more time on the market, up 44% and 11% for single family homes and condos, respectively, it is still approximately 40% below its 2019 pre-pandemic level.
What does this mean for home sellers?
Home inventory remains low, but buyers don’t have the same sense of urgency as they did earlier in the year. It is important to showcase your home in its best light and price it right from the start. Buyers and their agents will decide to visit your home, or not, by looking at your property photos online. Are they professionally done or are the photos taken with a smart phone in bad lighting? You only have one chance to make a great first impression when your property hits the market. Strategizing with your agent up front based on your goals, and adjusting accordingly based on market feedback and conditions will be key.
What does this mean for buyers?
The shifting market means that you have more time to preview homes and decide if you want to put in an offer. There are less buyers in the market now, which translates to less competition, and more opportunity in negotiating a successful offer.
Regardless of interest rates being at historical lows or now, at highs, the decision to buy should be based on your needs and budget. Focus on your monthly mortgage payment instead of interest rates. There will be the option to refinance later when interest rates drop or when you build equity in your home to lower your monthly mortgage payment. However, there won’t be the option to purchase that same home for the price that it is today.
