Would Be Homebuyers Find Themselves Standing Pat Awaiting a Home Price Decline That is Slow to Arrive – Meanwhile Rates Are Still Higher Than We’ve Seen in Decades
It’s no secret that a lot of Pocono homes sold for higher values than ever before the past couple of years – but that market is gone. Couple this with the Federal Reserve raising interest rates and the result is a stagnant market where buyers and sellers are essentially playing “chicken” over who will adapt first – and nobody is winning.
Buyers are pickier now than the past few years considering they are looking at purchasing in a market where interest rates are double what they were before the “buy frenzy” of the pandemic era. They are unwilling (and in many cases unable) to make as many compromises with costs so high and they would rather wait for the right place than to take a chance on something that isn’t exactly what they want considering how much they will be paying.
Another facet of this problem is that interest rates were around 4% for so long that a lot of homeowners are currently enjoying a desirable rate like that and are hesitant to sell what they have since: one, they aren’t going to get top dollar now, and two, selling would position them to become buyers and they don’t want to buy at 8% interest rates. This situation being so prevalent is part of why the inventory remains so low – and with low supply and high demand, you get higher prices.
So something’s got to give, right? But what is it going to be?
In my opinion, the first thing that will happen (and has already begun) will be sellers having to get realistic. That doesn’t necessarily mean that prices are going to topple immediately, but rather that the well-priced listings that offer what buyers want (with less compromising) will still sell quickly even in this current market. It also means that listings that have “seen better days” and haven’t been updated since the Reagan Admin are not going to be cashing in on top dollar just as a matter of how much square footage they offer – and if these sellers do not accept this reality they will sit on the market and suffer the effects of an overpriced listing in a market with super picky buyers.
It is tough to say where things are going, but it is easy to see why buyers are staying put and why homeowners are unwilling to re-enter a housing market with rates higher than we’ve seen since the turn of the century. With the recent news that the Fed plans on dropping rates over the course of 2024, maybe some of this situation will loosen up a bit – but until there is a lot more inventory, I don’t foresee prices going down a whole lot further.
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When you’re ready to talk, shoot me a message and let’s discuss your goals and how we can go about getting them achieved.
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