As of the writing of this particular post, Massachusetts presently has 10,542 homes on the market with 8,279 also under agreement. A majority of the homes on the market have been on over 30 days, with more than 4,000 of the 10,000+ homes for sale being on the market for over 60 days! Is this an indication that we are seeing a slow down in the market?
Maybe. As real estate agents who are out every single day seeing and showing homes and listing homes, we are noticing more price drops and more homes coming back on the market after doing the “no showings until open house” crap strategy. I drove by a bunch of open houses this weekend that had no one there! When was the last time you saw that! Is this because buyers are becoming more fussy about how they are spending their money? Maybe. Pre-approval amounts are being reduced because of the rising interest rates so a buyers’ buying power is being reduced because the pre-approval is based upon monthly debt and if mortgage rates increase, that means their monthly debt increases thereby reducing the pre-approval amount.
Buyers are definitely tired of bidding wars and with mortgage rates rising, they have less buying power. With less buying power, homes will start to sit on the market. This is NOT a bad thing. Again, the rising prices were not, and are not, sustainable.
Typically and historically, when interest rates climb, home prices decline. This is NOT to say home prices will plummet. Far from it. We will just see a stabilization for the next couple of years. If anyone thought the way the market was going was never going to stop, you’re crazy. The prices are NOT sustainable.
Multiple family homes are definitely still hot and getting crazy prices and certain towns (especially Boston and surrounding) are still getting crazy prices but those too will slow down eventually. New constructions are selling like hot cakes still. Again, the market will not turn over night – this post is about the signs that we shouldn’t be ignoring that are telling us where the market is heading. You don’t want to be the “coulda, woulda, shoulda” seller.
NEXT SELLING MARKET
As we head into Graduation Party season (June), we will then be in vacation season (July) so it will be interesting to see what happens during the next normal active market (fall selling market). We are already seeing the higher priced homes do some price drops and inventory seeing longer days on market. Although there are still some homes that receive multiple offers, some are actually sitting. The last few years after vacation season, the market still saw multiple offers and over asking prices so let’s see what 2018 brings! We’ve been predicting the market will slack at the end of this year so we shall be watching the market closely.
THINKING OF DOING AN ADDITION VS SELLING?
If you are thinking of selling, don’t fret, you’ll still get a higher price than you would have a few years ago because the prices won’t tumble down. If you’re considering doing an addition or a major remodel, definitely think twice. We are nearing the top of prices so there isn’t much equity left – doing an addition now or a major remodel will likely not see you a return on the investment. These things are best done during the bottom of a market so that you can capitalize on the higher prices when we are on the bubble. Sell high and buy high. The equity you have when selling will be your down payment on the house you purchase and you can always refinance when the rates are lower. If you still insist on an addition, wait a few years. Take the home equity loan now while prices (equity) are high so you get the maximum line of credit, but wait for the next crash to do the addition/remodel. You’ll then be able to find a contractor and get a good price on the work.
And, as always (here comes the plug to work with us:-) if you are looking to buy or sell, give the team at Key To The Dream Realty Group a chance and text or call us at 781 269 2195 or email us at firstname.lastname@example.org.
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We service Real Estate sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, Uxbridge, Blackstone, MA. We service Bristol County, Massachusetts as well (Attleboro, North Attleboro, Easton, Norton, Mansfield, MA) and all of Rhode Island! We have experts on Cape as well and in the City of Boston and surrounding towns. We go where you need us to be because we know you want to work with truth-worthy, honest and hard-working real estate agents! Have car – will travel 🙂