it appears the raleigh real estate market is finally slowing down
hello everyone this is chris morton real estate broker with exp realty in raleigh north carolina
and sometimes change happens very slowly and sometimes change happens very very quickly
this past weekend we saw a dramatic change in the triangle raleigh real estate market it appears
that the home buying frenzy that's been going on for the past two years may have softened up just
a little little bit which is a very good thing if you're a home buyer on today's video we're going
to tell you all about what all of this means for you if you're in the market to buy or sell a home
and if you stay until the end we're going to give you some practical tips on how to navigate this
crazy new normal that we're experiencing so we're now seeing homes in the zero to 500 000
price range that used to sell in a matter of days take a little bit longer to be on the market in
fact homes in the 700 to 800 000 price range are selling the fastest of any of the homes in the
triangle area with 800 and 900 000 homes selling just about the same as homes in the 400 to 500 000
range this is absolutely unheard of traditionally in our market homes in the lower price bands sell
much much quicker than homes in the higher price bands and for homes in the 400 to 500
range taking this long to sell is really really shocking we spoke with a builder representative
in wake forest over the weekend and they say they're experiencing a noticeable reduction
in foot traffic into their neighborhood in fuquay varina another builder representative with a
different company told us over the weekend that they released four or five homes for sale to be
purchased and a couple of them got zero bids which is extremely surprising these homes are all in the
400 to 650 000 price range for both builders this is a complete reversal of what we saw in the
marketplace just even a few weeks ago this goes to show you that we're definitely experiencing a
slowdown impacted by the higher interest rates and it appears that the price bands that are mostly
affected by this are the ones where you're going to see your first time and second time home buyers
namely the zero to five five hundred fifty thousand dollar price range but don't get me wrong
homes uh are still selling even in that coming soon phase when people aren't allowed to actually
go in the homes they are allowed to buy them sight unseen based on the photos and and maybe the video
or virtual tour of the home but generally the homes that are that used to be good enough
are now getting passed over for those homes that are really great and look really really good
so what is causing all of this slowdown well home buyers that have been beaten up by the market the
last couple years where they've had to put in multiple offers on homes and probably not been
very successful and they go visit a home and there's 15 20 people in the home those buyers
are just getting worn out and then topping on top of that the interest rates going up and up and up
a good number of those buyers are just saying enough we just got to take a break and sit on
the sidelines and kind of catch our breath their equilibrium has been thrown off by the craziness
of the market and unfortunately the higher interest rates and it's causing these people
to just take a pause the effect of all of this is you're going to have fewer buyers out looking for
homes currently recently we've seen fewer showings on homes for sale and fewer homes getting multiple
multiple offers and this has all happened in just the past week or so also i should add that the
investors that were out there buying up a lot of the first time home buyer homes the zero to
let's say 400 000 range are kind of sitting on the sidelines as well right now i think they're taking
a pause as well based on maybe the interest rates and trying to re-evaluate what they can buy and
what they can invest in to turn a profit so those investors that were out there competing
with a lot of the buyers they're sitting on the sidelines as well so net result you're ending up
with relatively few buyers out there chasing all of the homes are out and again we don't know how
long this is going to last it may just be a little bit of a pause so that everyone can kind of catch
their breath but we just want to make everyone aware of it so a personal story here i had a
listing go of for sale this weekend for 445 000 in holly springs and i have a very good friend
in the real estate industry that had a 275 000 townhome go for sale in raleigh with a lakeside
view both homes got zero interest from investors now this is obviously not uh this would be a gross
generalization if we said all investors have stopped investing based on just these two homes
but it definitely is something we need to keep an eye on and it's definitely impacting the market at
least in the short term that these investors are kind of sitting on the sidelines so if you are
out shopping for a home and you're in that zero to 500 000 let's say price range you can expect
that you're gonna see a little less competition but if you are in the 550 000 and above category
we don't really think that this pause is going to particularly impact you very much for a couple of
reasons number one most people that can afford a 550 000 or million dollar home they could stand
the increase in interest rates the extra payment they're going to have to be making every month
they could stand that and weather that storm until they hopefully are able to refinance down into a
lower rate so we don't really think that that price band is going to be as vulnerable as say
the zero to five hundred thousand dollar price span as well those people that are buying a 550
plus home might probably have just recently sold their smaller home that they've moved out of and
into this bigger 550 000 home and so they're flush with cash they've got some more money than
they really anticipated having because again the market has been so strong lately so they therefore
have more money to throw into their 550 which would bring the cost of their mortgage down to a
very manageable rate and so therefore we don't see the 550 000 and above price category those buyers
particularly affected by the higher interest rates and as we've said before we don't anticipate
prices are going to take a terrific tumble maybe homes that were overpriced in anticipation of a
bull market where there was a massive run-up in prices maybe those homes are going to need to
adjust their prices down a little bit to grab some buyers and get sold but we really don't
think prices are going to take a massive tumble from say 450 down to 300 or 350 there's just
not enough inventory out there to suggest that there's going to be an oversupply compared to
the number of buyers out there so bottom line we think prices are going to be fairly steady
maybe increase a little bit over time at least for the short term but not this terrific tumble that
you may have suspected is going to happen with less buyers out there remember in order to have
a dramatic drop in prices you've got to have more inventory available than you have buyers
to buy that inventory of homes right now we've got the reverse even with the higher interest
rates we've got still way many more buyers out there than there are available homes to buy
so what helpful advice can i give to the buyers and the sellers out there that are in the market
to either buy or sell a home well first if you are a buyer that does not need a mortgage or you have
a sizable amount to put down and so therefore you can weather the storm of a higher interest rate
this is really a golden opportunity for you to buy a home there's likely to be very much fewer buyers
out there to compete for those homes so you're able to go out and find the cream of the crop
find the best home for you give it a little bit of time to think it over and then make a good
offer and win the home versus in the past you may have been competing against like 20 or 30 offers
likely now you're gonna probably be competing against five or six or seven offers which
in my mind is a lot better odds if however you are a buyer that is very dependent on a mortgage
and the interest rates are going to impact you i definitely recommend the first thing you do is
talk to your mortgage broker find out if you still are qualified to buy in that max budget you have
find out how much more you're going to have to be paying every month for that mortgage and if
that fits in your budget or not the last thing you want to do is to be house poor
as we call it where you you have a beautiful home but you can't afford to go out and you have to eat
ramen noodles every night we don't want that to happen for you you need to be able to go out to
restaurants and have a little bit of fun in your life so know that you first need to talk with
your mortgage broker see where you stand and maybe you need to peel back on your max budget if your
maximum is say 350 000 maybe you need to peel back to like say 295 000 for your max budget
the positive news about all this is if things continue the way they look like they're continuing
you're not going to see those homes selling for 50 100 000 over asking price at least that's where
things sit right now it turned very quickly on a dime this week it may very quickly turn back again
who knows by the time you are watching this we may be sitting at having to pay 200 000 over asking
hopefully not we're saying our prayers hopefully not but it is possible that you could get into a
home and not have to pay wildly ever asking price if you buy very very soon for the home sellers
know that the market has definitely changed and if your home was good enough in the past it may not
be good enough anymore buyers are going to be a lot pickier because they have less competition so
know that you need to have your home looking as we say like a model meaning the new construction
model homes that are beautifully staged and modern looking and and clean and attractive your home is
going to need to look that way so if you have a home that you currently have on the market for
sale or you're planning on putting a home on the market know that you have to provide buyers with a
very strong value they have to be very compelled to buy your home over one of the other homes
in other words sellers must go back to marketing their home as if it is 2009 or 2010 right now
where homes sat on the market for a long time so what do you need to do number one make sure your
home is very clean very decluttered it needs to be looking like a gym when someone walks into it
number two strongly consider staging the home staging definitely makes a big difference it
helps you pull stuff out of it and declutter it and make it so that people can envision themselves
living in that home in your home number three thing strongly consider getting a pre-inspection
so that you know what repair items are needing to be done and maybe if there's anything really
egregious that that is obvious to anyone maybe you go ahead and get that fixed maybe you have a light
that's out it might be a simple thing as needing a light bulb but because you walk by it every day
you don't notice that there's a light out getting a home inspection is going to tell you what's
wrong with the home and it's going to be able to put a buyer in have give the buyer peace of mind
that they're not buying a lemon by buying your home if you get the pre-inspection done
number four thing you need to really think about doing getting professional photography getting
a professional walk through video done that's going to put your home in the very best light
and of course hire yourself a very professional very experienced very aggressive listing agent to
get your home sold a very good agent is going to maximize the most value you can get for your home
so take a look at this video we think you're going to really really enjoy it if you are
considering a move either into or out of the triangle especially in these difficult
times we're entering ourselves into we would love to be your real estate agents of choice
my team and i please email us at hello at mortonbradbury.com or click on the link below
please like and subscribe if you haven't already and we'll see you on the next one take care bye