Where do we sit, q4 2022?
As of October 2022, the Atlanta real estate market is balancing. Slowing ticking back towards the center of the pendulum. It is key to realize this is healthy for a market to balance itself.
Buyers, this is a blessing for you. No longer are the days of selling your soul for an accepted contract. Buyers have more options now, and better yet, they are less pressed for time.
How should buyers be positioning themselves?
- Right now, the name of the game is patience. Being patient for the right deal is crucial. Once that deal rears itself into frame, be ready, follow through with the strategy in place.
- Stay in the loop with your lender. With interest rates changing consistently, it is imperative you understand how this affects your affordability.
- MAINTAIN YOUR CONTINGENCIES. In most cases, buyers are now able to keep their inspection contingency, appraisal contingency, financing, so on and so forth.
HOW do higher rates affect my purchase?
- The no-brainer here is your payment. A higher interest rate is going to make your monthly mortgage cost more expensive (Considering the same purchase price, downpayment, discount points, etc.). A good rule of thumb to follow is for every 1% your rate goes up, you lose about 10% in purchasing power.
- Luckily, higher rates are going to cut down on the amount of competition in the market. More specifically, it is going to trim down excess demand. This means you have less competition when shopping for a home and submitting offers.
- Lower demand in many markets is leading buyers to have additional negotiation room compared to that of the month's prior (Q1 & Q2). Whether that is with price, terms, or contingencies. *This is very dependent on the pricing strategy of the home in question, desirability, terms, etc.*
- A key point to consider is, you can always refinance your rate in the future. You are not married to this loan forever. However, you generally are married to your home for a longer time span.
Is now the right time to buy? Should i wait?
- This will vary on your situation. For a lot of families, you have much better things to worry about than perfectly timing the purchase of your primary residence. After all, your primary residence is generally not seen as an investment. *Unless you intend for it to be from the beginning, obviously there will be exceptions to this*
- Remember, real estate is generally a long play. The average homeowner lives in their home for 13.2 years. My point is, timing the market to a T is out of many homebuyers minds from the get go. It is much more crucial and reasonable to focus on buying a solid home in a desirable area. Your biggest hedge to potential downside risk will be LOCATION, LOCATION, LOCATION... This is a critical decision you must make in your home-buying journey. A good location is a make or break in the future of your homes value.
To always receive my up-to-date insight on the Atlanta market, subscribe to our weekly newsletter. Also, follow us on Facebook, Instagram, and TikTok, as we are always posting exciting new content on the market here in Atlanta.