A seller’s market: the sheer phrase will strike fear into the hearts of home buyers and will encourage people to clasp their wallets, wait, and hope that soon the magical phrase, ‘buyer’s market,’ will come upon them.
While there is, unfortunately, no crystal ball when it comes to the real estate market, the trends in the Raleigh, NC and the Triangle have been steady. Therefore, they’ve been predictable. And with more than 70 people moving to the Triangle every day and more businesses finding a home here, the housing market looks to remain strong. Most experts agree, housing prices are not coming down anytime soon.
With that in mind, potential buyers often consider renting instead. But, before they sign a lease, there are three major things they should consider.
Renting: still expensive, without the equity
What’s remarkable about the housing market being so strong in the Triangle is that it’s almost equally hard to find affordable housing to rent. With businesses willing to pay relocation and rental fees as workers get settled, and a continued increase in population, rent continues to rise. Often, the rent in a neighborhood is equivalent to a mortgage payment. But the rent doesn’t get you equity in that property.
Cindy Poole Roberts, Raleigh Realtor and founder of Merriment Realty, has witnessed renters kicking themselves over the last year. Buyers who jumped in a year or two ago are thrilled with the equity they have built. Renters who didn’t, are now paying more rent, and when they finally purchase, will be paying more for the same house because of prices going up and interest rates going up (and their buying power going down).
Speaking of that interest rate...
While it’s true that the current interest rates look bleak compared to the record-breaking low rates of a few years ago, that is not a good reason to wait. A big pitfall is buyers saying they want to wait until the interest rates come down. Look at the interest rates over the years, they are still good now. No, they’re now 2-3%, but they may not ever be that low again. Waiting for the rates to come back down will mean sitting on the sidelines while our prices still go up.
You can always refinance at a later date. A popular phrase being used currently is, ‘date the rate, marry the house.’ In addition to wrapping your head around the reality of the market, there are a wealth of financing programs, inclucing first time homebuyer programs, and opportunities buyers should be aware of. Working with a licensed real estate agent will help buyers create the best possible portfolio for themselves so that when it is time to buy, they can be assured they are getting the best deal possible.
You can buy a home
As much as prices and interest rates may keep people from dipping their toes into the market, there is another perceived obstacle, that there aren’t any homes to buy.
The last two years were absolutely insane and very painful for buyers. Part of what made the process painful was that over the course of the last year, 1 in 4 buyers were investors. These deep-pocketed purchasers would pay over asking price, sight unseen. It’s possible that personal experience or hearing horror stories would encourage would-be buyers to continue to stay in a rental situation. But, there is hope.
When the interest rates changed, much of the craziness slowed. Homes still sell with multiple offers, but with not nearly as much competition.
So while it is still a seller’s market in the Triangle, it has become a much friendlier landscape to buyers. Additionally, experienced Realtors have advantages when it comes to putting together bid packages and negotiations that help buyers land their dream houses.
Good advice for buyers is to not let fear keep them from the housing market. You can buy a house! You do not need a 20% downpayment! It just takes having a Realtor who is willing to work with you to make it happen. They will set you up with a great lender, and it just takes a little patience.