Portland realtor discusses what rising interest rates mean for local buyers
PORTLAND Ore. (KPTV) - Over the past few years, it’s been a home seller’s market with inventory low and the demand high. But now we’re seeing a hot housing market starting to cool down amid high interest rates.
“It makes a big impact,” said Carey Hughes, Principal Real Estate Broker with Keller-Williams Realty Professionals. “The same $500,000 home at a 3.5% interest rate, say 6 months ago, will now cost $900 more per month with the rate hovering just above 6%.”
How is this affecting those looking to sell their home? Hughes says they’re not seeing as many offers now and home prices are being bid up as they have been in the past.
“The person who is selling the home of course have high expectations based on the prices just a few months ago, but being that we have low inventory I can confidently tell a seller that we are still going to get their home sold,” said Hughes. “There are qualified buyers, there’s just not as many of them. So we are not getting as many offers accepted, but we really only need one great offer and a solid offer with a committed buyer to get a home sold.”
As for those looking to buy a home, while it’s still expensive, they have more options.
“It’s more expensive for buyers and that’s the hard thing,” said Hughes. “People are being priced out of the market, but those who are well qualified and truly have a need to find a new home, they have more choices. Homes are not selling as quickly, so they may actually be able to look at a home, think about it, ask some good questions, do a little research, and then decide to make an offer. Instead of competing against 3, 4, 5 or even 10 different offers they may be the only offer or there may be just a few and instead of having to pay excessively above list price, homes are selling at list price.”
Hughes says while the higher interest rates look like they are here to stay for a while, the market is still healthy and it’s a good time to buy and sell.
“That’s not just me as a realtor saying that. We have a very healthy market because there is very low inventory and low inventory means that buyers traditionally don’t have a lot to choose from,” said Hughes. “As sales slow and inventory will grow just a little bit, but we still don’t have enough homes to meet the demand that is out there, even with higher interest rates. Interest rates have jumped and they are hovering in the 6% zone now, but that means there are still going to be buyers looking and sellers ready to sell,” said Hughes. “So it’s a matter of putting those folks together and coming up with good terms. We have to get a little more creative. Sometimes buyers may need a credit from sellers to cover some of their closing costs, perhaps if they are buying down the interest rate so they can have a more affordable payment, but we have to be able to pull out our expertise and fine tune our skills to negotiate contracts that work for both parties rather than it being very one-sided on the seller’s side as it has been.”
She says now more than ever it’s important to work with an experienced real estate agent.
“There have been a lot of new realtors that have joined into the real estate industry over the course of the last ten years,” said Hughes. “In fact, the amount of real estate agents has doubled. Those folks that have joined in the last ten years, this is the first time they are experiencing a market that is cooling down. So it’s super important to know that the person you’re working with has true negotiation skills, experience to rely on, and professional expertise now more than ever.”
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