Advantages for Home Buyers in Today's Market

Advantages for Home Buyers in Today's Market

Doom and Gloom is all we hear in the news these days when it comes to the real estate market.  Are we looking at another crash like we saw in 2008?? (*NO*)  Interest rates are at a 20 year high hovering around 7%. (**about average from a historical perspective**)  The monthly cost of home ownership has definitely increased with interest rates but the changes in the current real estate market have also brought some advantages to buyers that we haven’t experienced since 2019.

The increased interest rates are definitely affecting the market but not all in a negative way.  In the “madness” of the market in 2021 and early 2022, one thing buyers did not have was time.  Homes sold in a matter of days if not hours.  Buyers had to make decisions quickly and in some cases made offers without ever seeing the home in person.  If they waited, that home would oftentimes no longer be available.  Now buyers are having time to see homes, consider their options and in some areas they are even able to go back and see the home of interest for a 2nd look before making a decision.  Homes in the Triangle market are averaging around 24 days on market before going under contract.  This is still rather fast compared to 2012-2015 however a huge slow down to the numbers in 2021 with an average of less than 4.

Triangle home buyers are no longer pressured to offer what I consider to be ridiculous amounts of Due Diligence deposits.  Deposits in the market are always negotiable with no set amount; however, “normally” one might expect to see DD deposits around 1-2% of the contract price.  In the height of the market last year, it became quite normal to see (and often expected by the seller) these non-refundable deposits to be in the $50,000-$100,000 range.  For the most part, those days are over which is a HUGE advantage to buyers.  Getting back to more “normal” amounts means buyers may be able to get under contract with less money at risk and allow more leverage later in the transaction.

Buyers are experiencing leverage for the first time in over 2 years.  When you have less money at risk as a buyer, it helps create some leverage because the buyer is more capable of walking away from the contract if they choose.  Life happens and buyers change their mind and it is much easier to walk away from a $3000-$5000 deposit if need be than it is a $50,000 deposit.  Sellers are also very aware of this fact and this leverage point may allow for the buyer to negotiate repairs or concessions with the seller after getting under contract based on the home inspection.  We rarely saw any concessions or repairs during the market of 2021.

The current Triangle Real Estate market is very similar to that experienced in 2019.  At that time, those of us that were in the business considered that market to be red hot.  Don’t get me wrong…..based on demand and inventory, we are still very much in a seller’s market however the buyer is experiencing advantages of time, leverage and less upfront risk.  

If you are considering purchasing a home in the Raleigh/Durham area, give us a call today (919-300-5421) or check us out online WelcomeToCarolina.com   We would love to speak with you and talk about how we can help you navigate this market to your advantage.