This Is the Sweet Spot Homebuyers Have Been Waiting For

Today’s Market is a Sweet Spot for Condo and Homebuyers

After months of sitting on the sidelines, many condo and homebuyers who were priced out by high mortgage rates and affordability challenges finally have an opportunity to make their move. With rates trending down, today’s market is a sweet spot for buyers—and it may not last long.

So, if you’ve put your move on the back burner, here’s why maybe you shouldn’t delay your plans any longer.

As you weigh your options and decide if you should buy now or wait, ask yourself this: What do you think everyone else is going to do?

The truth is, if mortgage rates continue to ease, as experts project, more buyers will jump back into the market. A survey from Bankrate shows over half of homeowners would be motivated to buy this year if rates drop below 6% (see graph below):

With rates already in the low 6% range, we’re not terribly far off from hitting that threshold. The bottom line is, that when they drop into the 5s, the number of buyers in the market is going to go up – and that means more competition for you.

That increased demand will likely push home prices up, which could potentially take away from some of the benefits you’d gain from a slightly lower interest rate. As Nadia Evangelou, Senior Economist and Director of Real Estate Research at the National Association of Realtors (NAR), explains:

“The downside of increased demand is that it puts upward pressure on home prices as multiple buyers compete for a limited number of homes. In markets with ongoing housing shortages, this price increase can offset some of the affordability gains from lower mortgage rates.”

So, while waiting to buy may seem like a smart move, it could backfire if rising prices outpace your savings from slightly lower rates.

What This Means for You

Right now, you’ve got the chance to get ahead of all of that. Today’s market is a buyer sweet spot. Why? Because a lot of other buyers are waiting – which means not as many people are actively looking for condos and homes. That means less competition for you.

At the same time, affordability has already improved quite a bit. Recent easing in mortgage rates has made homeownership more accessible. As Mike Simonsen, Founder of Altos Research, says:

“Mortgage payments on the typical-price home are 7% lower than last year and are 13% lower than the peak in May 2024.”

And while the supply of homes for sale is still low, it’s also higher than it’s been in years. According to Ralph McLaughlin, Senior Economist at Realtor.com:

“The number of homes actively for sale continues to be elevated compared with last year, growing by 35.8%, a 10th straight month of growth, and now sits at the highest since May 2020.”

This means you now have more options to choose from than you’ve had in quite a while.

With fewer buyers in the market, improving affordability, and more homes to choose from, you have the chance to find the right one before the competition heats up.

Why Waiting Could Cost You

If you’re waiting for the perfect time to buy, it’s important to understand that timing the market is nearly impossible. The longer you wait, the higher the risk that market conditions will shift—and not necessarily in your favor. As Greg McBride, Chief Financial Analyst at Bankrate, says:

“It’s one of those things where you should be careful what you wish for. A further drop in mortgage rates could bring a surge of demand that makes it tougher to actually buy a house.”

Bottom Line

Don’t wait until you have to deal with more competition and higher prices – you already have the chance to buy a condo or home while we’re in the sweet spot today. Let’s connect to make sure you’re taking advantage of it. 734-761-3060 or info@condohotline.com.

People Are Still Moving, Even with Today’s Affordability Challenges

People Are Still Moving, Even with Today’s Affordability Challenges

If you’re thinking about buying or selling a condo or home, you might have heard that it’s tough right now because mortgage rates are higher than they’ve been over the past few years, and home prices are rising. That much is true. Take a look at the graph below. It breaks down how the current affordability situation stacks up to recent years.

The National Association of Realtors (NAR) explains how to read the values on the graph:

“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home.”

The black dotted line represents that 100 value on the index. Essentially, the higher the bar, the more affordable homes are. As you can see, the orange bar for today shows higher mortgage rates and home prices have created a clear challenge. But, while affordability is definitely tighter right now, that doesn’t mean the housing market is at a standstill.

According to NAR, based on the pace of sales right now, just under 4 million homes will sell this year. With some simple math, let’s break down what that really means for you:

• 3.96 million homes divided by 365 days in a year = 10,849 houses sell each day
• 10,849 divided by 24 hours in a day = 452 houses sell per hour
• 452 divided by 60 minutes in an hour = about 8 houses sell each minute

So, on average, over 10,000 homes sell each day in this country. Whether you’re a buyer or a seller, this goes to show there are still ways to make your move possible, even at a time when affordability is tight.

An Agent Can Help You Make Your Move a Reality

You may be wondering how other homebuyers and sellers are making this happen now. One of the biggest game-changers in today’s market is working with a trusted local real estate agent. Great agents are helping other people just like you navigate today’s market and the current affordability situation, and their insight is invaluable right now. See what our clients have to say about us!

True professionals will be able to offer advice tailored to your specific wants, needs, budget, and more. Not to mention, they’ll also be able to draw on their experience of what’s working for other buyers and sellers right now. This could mean broadening your search, if needed, to include other housing types like condos, townhouses, or neighborhoods a bit further out to help offset some of the affordability challenges today.

Bottom Line

You might think there aren’t many people buying or selling condos or homes right now since affordability is tighter than it’s been in quite some time, but that’s not the case. It’s true that buying a home has become more expensive over the past couple of years, but people are still moving.

If you’re hoping to buy or sell a condo today, know that other people are still making their goals a reality – and that’s happening in large part because of the help and advice of skilled local real estate agents. Want to talk to a trusted professional about your own move? Let’s connect today at 734-761-3060 or info@condohotline.com and together we’ll find your best path to homeownership!

Ann Arbor Condo Market Update – Fall 2023

Ann Arbor Condo Market Update for Fall 2023

The Fall 2023 condo real estate market is here and with it the hopes of a renewed increase in buyer activity. But first, let’s take a look at the statistics from the first half of the year.

Year-to-Date Condo Stats

Comparing statistics from the first half of 2022 to 2023 we’ve seen:

• New listings decreased by 16.8% going from 917 to 763 condos listed for sale YTD.
• Pending sales, the number of units that have gone under contract with a buyer, decreased 5.8% from 728 last year to 686 this year.
• 740 condos closed last year with 634 this year making a 14.3% decrease.
• Average sale price increased by 2.7% bringing it to $353,761.

April was the top listing month with 135 condos listed for sale and was also the busiest month for buyer activity with 146 pended units. June had the most closings with 114, which makes sense since it typically takes 30-45 days to close from the time of a bottom-lined offer. Due to the shrinking number of condos being listed for sale, the average sale price is continuing to increase because of a lack of availability. Prices will likely begin to stabilize once more inventory becomes available and that may not happen until mortgage interest rates cool off.

Downtown Ann Arbor Condos

In the downtown Ann Arbor area, there are currently 25 active listings, plus 10 pending with a buyer. So far this year, 71 condos have sold with an average sale price of $567,586. Compared to this time last year, there were 106 sales with an average sale price of $525,528. The number of closed sales decreased by 33% YTD and the average sale price increased by 8% following the trend of all Ann Arbor condos.

Fall 2023

The Ann Arbor condo market is beginning the fall season with 130 units listed for sale with 57 of those under contract. That leaves 69 condos available for a buyer to purchase. 38 of these are new construction with 14 under contract. Let’s take a look by price point:

With mortgage interest rates still climbing, affordability comes into play as you can see by the slower movement in the higher price points. Buyers need to remain vigilant in their search and be aware when new listings come to the market. Sellers, in higher price points especially, need a Realtor who knows their market niche and the inuendos of their community so they price accordingly. For more information on buying and selling in the Ann Arbor Condo market, contact the Real Estate specialists with The Bouma Group at 734-761-3060 or info@condohotline.com today!

Data was gathered from the Ann Arbor Area Board of Realtors