Higher interest rates, inflation and a possible recession have a lot of home
buyers panicked so is now a good time to buy a home in Raleigh, North Carolina?
Hello everyone, this is Chris Morton real estate broker with EXP Realty in Raleigh,
North Carolina and let's start with where we are right now. Inflation is at its highest rate that
it has been in the last 40 years. Interest rates are now over 6% for the first time since 2008.
And just last week, the Fed increased the interest rate three quarters of 1%,
which is the highest single day increase since 1994. With all that, there's some really crazy
misinformation flying all over the internet. Despite what you may have read and heard,
this is not, I repeat, not, the housing crash of 2008 all over again. As we've said, many times
on our videos, the fundamentals of our market are still very, very strong. It is very difficult for
buyers to get a home mortgage. There's a very low inventory and those two things together are going
to result and they're not being this crazy housing crash where homes are having to be given away.
Unfortunately, because of the rise in interest rates, it's likely that
20 to 25% of all the buyers that were out there just even a month ago,
no longer qualify for a mortgage. The flip of that is 75% of the people who were able to qualify for
a mortgage last month still do. Plus, please remember, there is still a gigantic huge pool
of buyers that are ready, willing, and able to jump in the market and start buying a home.
Among those you have the millennials who have put off buying their first home way past the normal
time that people buy their first home and they are chomping at the bit to jump in the market.
There's also people that have sold their home in the past that are sitting in a rental right now,
waiting for the market to soften a little bit, that are ready to jump in. As well, there's people
from all over the country that are flushed with cash from selling their homes. They are looking at
the media that's saying how great the Raleigh and triangle market is. They're planning to make
a move here. And last but not least, don't forget all the investors that are sitting out there that
are sitting on a pile of investment money, waiting to invest it and they know how great our market
is. So expect all of these people are going to continue moving into the market for real estate
in the triangle area and will continue propping our market up and continue keeping it healthy.
And for everyone that's worried about interest rates, I heard an interesting quote yesterday,
“you marry the house and you date the rate.” What that means is you buy a house,
you plan on living there long term and you know that that rate that you get on that house
initially can be refinanced down the road, when rates come down. And remember the rates we're
seeing today are some of the lowest we've seen in many, many decades. They just unfortunately
are not as low as the rates we had last year and even just a couple of months ago.
So should you buy a home right now? Well, my team and I absolutely firmly believe that now is a very
good time to buy a home., if you're ready to buy a home. A lot of the competition is still sitting
on the sidelines and inventory is increasing so the good news is if you're ready to buy a home,
you can afford to be a little pickier. Now, if your awesome dream home comes on the market this
weekend, and you aren't able to get it because of competition or the timing just isn't right.
Know that it is likely that another really amazing home is going to come for sale next week or the
week after. It's not necessary for you to jump on that home today in a frenzy, in a panic like you,
would've had to do six months, a year ago and pay top dollar for it. It's simply not something you
have to do today. And I know what some of you're thinking, of course, this guy wants us to buy
real estate and think it's a good time to buy real estate. It's good for him if we do. Please
know my team and I are absolutely committed to helping our clients make very good decisions
for them and in fact, we spend a good bit of our time talking people out of buying homes
that aren't a good fit. The last thing we would ever want to have happen is you jump into a home,
stretch yourself to do so and stretch your budget and end up miserable down the road. Our success is
absolutely a byproduct of making our clients happy and helping them make good decisions for them.
So with all this craziness going on, should you just throw up your hands and rent? Well,
if the alternative to buying is renting, then you definitely should buy because
so many people over the last couple of years have decided to rent instead of buy.
Rental prices have skyrocketed over the past two years, just like home prices have.
The only difference is if you're renting, you're paying someone else's mortgage. and in effect,
you are likely throwing away up to $40,000 a year that you could have put towards home equity.
So if you want to buy a home, but you're concerned about a possible economic downturn,
what are the solutions? Well, one solution is to buy below your budget. So for example,
let's say your max budget is $600,000, maybe you should look in the $500,000
range to see if any of those homes still fit all of your needs while giving you a lower
monthly mortgage. If you decide to buy a resale home, look for deals and opportunities,
maybe look for homes that need a little bit of TLC, a little bit of fixing up.
Those are homes that likely other buyers have passed over, and it will give you an opportunity
to get in and possibly work with a seller who's willing to negotiate off of that asking price.
You just have to be willing to overlook bad paint, bad wallpaper, and possibly outdated appliances.
Another option is to look at new construction. Just a few months ago, new construction was as
competitive or more competitive than resale homes. There were many unscrupulous builders out there
taking advantage of helpless home buyers. Now a lot of those same builders are getting desperate
because they have a lot of inventory standing and they need to get rid of it. Our email box
has been flooded with emails from these builders, telling us all about the deals and discounts they
have for home buyers in order to get rid of all of these homes. But let me stress, we are talking
about the bad builders out there. There were quite a few really, really good high quality builders
during the boom- boom times that did not take advantage of home buyers and treated agents
with respect. We absolutely endorsed those builders back then and we endorse them now.
If you are considering taking a move into the new construction home buying market, email us,
and we're happy to help you find the best new construction deal for you. And know that if you're
looking for a great deal, the economic conditions, as we said, are not the same as they were back
in 2008. Don't expect homes to get heavily discounted and for sellers to be desperate.
We just don't expect homes that are for sale to start getting discounted $50,000 to $75,000.
Many homeowners that are trying to sell their homes today are locked into those
2 to 3% interest rates that we've had over the last couple years. And if these home sellers
do run into financial problems, it's very, very likely that they'll be able to put their home on
the market and get it sold before desperate time sets in. And in addition, many of the home sellers
out there own their homes outright. If they absolutely needed to move to another location,
it's very likely if they couldn't get their home sold, that they could just put it as a
rental property with rental rates being as strong as they are right now, get the home
rented and then move on to their next location. All of this was not the case back in 2008.
In 2008, a lot of people were in mortgages that they just simply would not be able to
qualify for in today's world. Back in 2008, when a lot of people were underwater with their mortgage,
they jumped into a rental property because it was cheaper than their own mortgage. This
is no longer the case. Now, almost anyone that has owned their home for over two years has got
around 50% or more equity in it. And so if you're thinking of selling your home, know that the very
best things you can do are, to declutter, give your home a very deep cleaning, stage the home
for maximum benefit and price it fairly. If you do those things, there's a very good chance you
will be able to get your home sold for a fair price and in a pretty decent amount of time.
So where's the real estate market headed? We ran a poll recently here on our channel,
where we asked everyone where they thought the Raleigh housing market was headed in the next
year. And this is what you said. Of the 760 of you who voted in the poll, 18% thought the market
was going to increase significantly. 27% thought it was going to increase gradually. 17% thought
it was going to pretty much stay the same. 25% thought it was going to decrease slightly. And 13%
thought the market was going to decrease significantly. Quite frankly, at this point,
we don't know what's going to happen. If you are buying or selling a home right this minute,
please put a comment below. We would love to hear your opinion, to see where
your perspective is on things. Right now, we are seeing a lot of price reductions among homes that
are for sale in the market. And it's easy to assume that we're having a massive decrease,
in that home values are dropping and dropping and dropping. In actuality, what's happening is
those homes were priced in anticipation of where the market was going to be, assuming we were
going to continue ratcheting up and up and up. And so now they're having to decrease the price
to get it back to where the current marketing conditions are. And really quite frankly, where
they should have been in the first place, where they should have priced them in the first place.
And please know that if we do happen to go into a recession that does not necessarily mean that
a housing crash is inevitable. In fact, during four of the last six recessions we've had in this
country, housing prices actually went up between three and a half and six and a half percent
in each of them. We continue to believe, as we've said, in many of the videos we've done here on our
channel in the past that home prices will continue to rise, but they will continue to rise gradually.
Please know that we still have strong buyer demand for homes in the triangle every day. My team and I
are getting calls and emails from buyers who are undeterred by the possible economic conditions we
have going on right now. We've actually seen a rise of people contacting us over the past few
weeks, which goes to show there are still a lot of active buyers despite the slowdown. And this
includes a lot of investors that are very, very interested in our triangle marketplace.
And if you're considering a move either into or out of the triangle area, my team, and I would
love to be your real estate agents of choice. You can email us at hello@mortonbradbury.com.
Call us on the number below or click on the link in the description. We'll be
happy to help you out and explore the options for you further. Please like,
and subscribe to this channel if you haven't already done so and as always,
we appreciate you watching, look forward to seeing you on the next one. Take care. Bye-bye.