The spring market has traditionally been the most popular time for buying and selling homes. Milder temps makes home viewing more comfortable, moving is less of a chore in warm weather, school is wrapping up, and buyers are poised to shop! However, buying before Spring could be a big benefit. Why? Buyers have more bargaining power now than they’ve had in the past couple of years, and it's not likely to stay that way when all the spring buyers enter the market. Here’s why:
1. Interest Rates Have Narrowed the Buyer Pool
Thanks to increased interest rates, competition has decreased quite a bit. This means sellers are seeing fewer offers and the offers they are receiving are closer to or even below list price. This is a big shift in the market from the frenzy of the past couple years where many homes sold super quickly with multiple offers over list price and terms strongly in the seller’s favor.
Obviously, no buyer is excited about paying a higher interest rate, but if it means the ability to lock in a home at a lower purchase price and with better terms, it may be a better option.
An interest rate can be refinanced down the road, but a purchase price can’t be modified.
No one can say for sure what rates will do, but we still have a low inventory of homes so if rates do dip, expect to see competition ramp back up.
2. Less Pressure to Submit a Quick Offer
With decreased competition comes fewer bidding wars demanding quick responses and less decisions made under tight timelines.
Buyers can be more methodical about their home purchase and experience far less “FOMO” than in recent years.
3. Motivated Sellers
Most sellers listing homes in the winter months have life events that are prompting their move.
They are moving because they have to sell.
These sellers are more likely to price their home to move quickly, and may be more open to accepting buyers' terms that will allow them to wrap up the sale faster.