Whether you’ve been househunting for a while or are thinking about getting into the market, here’s what you need to know about the real estate market right now.
State of the Market:
Housing prices are continuing to rise and were up locally about 10% from January and February of last year. There are even fewer new listings this year than there were at this time in 2021. Interest rates have ticked up; they were expected to increase another 3-4 times this year, however, the war in Ukraine may impact those increases. Still, the expectation of increasing interest rates and house prices has buyers out in full force, anxious to get locked-in on a home before costs rise again. Showings are plentiful, open houses have been packed, and most sellers are rewarded with multiple offers over the asking price.
Simultaneously, housing is not the only area of our lives being affected by inflation. The 7% CPI index annual inflation rate is the highest we’ve seen in four decades. Food is more expensive, utilities are a LOT more expensive, and everyone is feeling the most recent pinch of drastically increased fuel costs - whether that’s in the end-of-season fill-up of their home heating oil tank or paying what feels like ransom for gasoline at the pump.
So… let’s get super smart with our home-buying.
What to Do Now:
- Stay in close contact with your mortgage lender. Make sure your pre-approval letter is always current. Get full pre-approval, not the basic “pre-qualification”. An opportunity will arise for you when you least expect it, and you don’t want an expired or tenuous letter to be the reason your offer isn’t considered.
- Review your household/personal budget. Make sure you are taking into consideration not only the higher-rate increase in mortgage payment, but also the inflation that is affecting all the other expenses in your life.
- Keep saving. It’s not just the offer price that the seller will consider; it’s the overall strength of the buyer and downpayment size can matter to them especially if there is worry that the house may not appraise for the full sale price. Can a family member help you out with a “gift”? Discuss this with your mortgage lender.
- Talk about your househunting search socially, and keep your ears wide open. Even if you hear of a not-yet-listed home that isn’t a good fit for you, please let me know about it! If we do this together, the synergistic success could be high!
House-Specific Homework:
Waiting 45 minutes in line for a 15 minute look at a house that DOESN’T work for you will get discouraging really fast, consume your precious weekends, and get painful at the gas pump. Get good at looking beyond the strategically enticing marketing photos. Here’s what can be considered BEFORE investing time and money in a home tour.
- MLS information (direct from the Realtors’ database)
- Floor plan and plot plan
- 3D or video tour
- Any seller disclosure statements
- The deed - available at masslandrecords.com. This will reveal easements, rights of way and more
- GIS maps - available through the municipality’s website. These will show flood zones, conservation areas, abutters and more.
- Setting - online map services like Bing can provide a good sense of street traffic and abutting properties through both aerial and street views.
- Permits - often available through the municipality’s website. In some communities, un-permitted work has become a huge issue not just for the homebuyer, but for the city/town itself, with some insisting on the un-doing of un-permitted improvements.
A Challenge that is Rewarded!
There’s no sugarcoating it; buying a house in Spring of 2022 may be a challenge. Still, remember that interest rates are still historically quite low, and no one is predicting that home prices (or rental pricing) are going to reverse. By staying fully prepared, researching homes fully before leaping in, and maintaining a personal commitment to the process, buyers can still achieve their dreams of homeownership!