I know you have been waiting for this day to come… as of this week, I am reporting that the market is cooling down just a bit. Thanks to everyone for the steady stream of articles you’ve sent me saying just that! The National Association of Realtors (NAR) provided confirmation of this trend with their recent data report. That being said, I was in two bidding wars this week and our buyers were lucky enough to land one! Here we are at the inspection. The key here is strategic pricing; if you start at a reasonable figure, demand continues to drive the value up. Properties presented at the top of the price range tend to sit on the market longer and ultimately sell lower than the seller expected.
All of this considered, my personal observation is that buyer traffic has become less frantic than in recent months. NAR reports that last month the average number of offers per property decreased from 4.5 to 3.8 on a typical home. Of those taking the plunge and buying a house, only 29% of them are first-time homebuyers nationally. This group seems to have lost some of their motivation - they typically make up 40% of the market. But who can blame first-time buyers? Fatigue has set in after battling to win a house for so long!
Typically, low interest rates are enough to really incentivize buyers, and it's still a key ingredient to the frenzy we have seen - but it's not everything. Attractive interest rates don't help if someone has lost bidding war after bidding war. As I write this, the Federal Reserve released this announcement:
 "In light of those expectations, the committee voted unanimously to keep short-term rates anchored near zero. However, a majority of members now see the first rate hike happening in 2022. In June, when members last released their economic projections, a slight majority put that increase into 2023."
If you ask me, I think a cooling down period is to be expected. Barring any crazy events happening in this world, a shift closer to normalcy isn't a bad thing. After all, this wild rush in real estate was brought about by a pandemic that shattered so many peoples’ worlds. If the population becomes healthier, calmer, and more well-rounded, then the real estate market will also recalibrate. This cool-down will allow more inventory to build, and anxious homebuyers to land the property they deserve.