Real Estate News & Views: The effect of interest rates on the current real estate market
by Jackie Scheller
Look nearly anywhere and you will find glaring headlines about the real estate market. What does it all mean?
During our local Real Estate Q&A in March, several questions were addressed. It makes sense to share some of the discussion here. First and foremost, this market will straighten out when given some time. Homes in the Stockbridge area are still selling at competitive prices. The buying power has decreased for some (especially first- time home buyers) as increased interest rates also increase the monthly payment.
Research indicates that sellers are waiting to put their homes on the market until they find a replacement. Potential sellers are getting antsy, but selling often means trading a 3-3.5% mortgage interest rate for one closer to 7% on the new home. The National Association of REALTORS has also indicated that selling price and time on market is specific to the region.
Stockbridge area homes are generally on the market for less than 60 days and sell within 5% of the list price when priced competitively.
Buyers are being coached to “date the rate” and possibly buy down the rate at the beginning. A few mortgage products allow for lower rates in year one and two. Buyers can also plan to refinance once rates come back down. Sellers can negotiate contributions to financing charges to make a deal happen.
Seniors can stay in their free-and-clear homes with a reverse mortgage. I spent a great deal of time trying to understand this mortgage product. Bob Yopko from First Equity (in the Clock Tower in Chelsea) explained the process during our Q&A. It makes sense in many cases.
Cash remains king in the real estate market and many cash buyers are looking for homes. If you are thinking of buying or selling, it is worth your time to have a conversation with a local Realtor. We are fortunate to have several real estate professionals, some who live in Stockbridge, who are more than glad to answer your questions.
Spring has sprung and the yard work has begun. Enjoy!
Jackie Scheller, Stockbridge’s newest real estate broker, opened Performance Realty in September 2020. Office is located in the Back Street Building on North Center Street. Photo and image provided by Jackie Scheller.
