Summing Up the Current State of the Market
If you’re Facebook friends with a Realtor, it was nearly impossible to miss that interest rates dropped this week. When the Fed met on Wednesday, they left rates unchanged and projected three rate cuts in 2024. The news has given talks of rates in the sixes where we’d just been talking about rates in the eights! 😬
2023 has been a strange year for real estate sales - closed sales are down 6.6% and home prices are down 3.18% year-over-year for Kanab/Kane County.
Homeowners that might have wanted to sell, but don’t have to, and are sitting on a super-low interest rate, have chosen to sit on the sidelines for now. This keeps inventory down, and simple supply/demand principals keep prices up. But the question is....at what interest rate are those potential sellers converted into sellers?
The ability to unlock record high amounts of equity might result in a sooner-than-we’d expect answer. If they stay on the sidelines and rates drop even more, we’re going to see more multiple-offer situations that will drive prices up as buyers who have been waiting, either by affordability or preference, return to the market.
It is almost certain that the buyer pool will increase faster than properties get listed as rates drop so expect to see competition increase if interest rates continue to drop.
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