Although the real estate market has been experiencing one of the biggest seller’s markets in modern history, it’s important to remember that it has an ebb and flow just like any other commodity market. To gain a better understanding of how home prices could be affected in the near future, let’s look at how the changing market is impacting home sellers in Chino Hills.
Supply and Demand
In terms of the factors that impact housing prices, supply and demand seem to be the most significant.
During the global pandemic, both supply and demand have fluctuated but have almost always been well below each other. This imbalance has kept prices high while sending some property values skyrocketing.
As time has passed, the number of houses for sale has increased slowly but steadily. They’ve been snapped up by a large pool of buyers, some of whom have waited years for a suitable home to hit the market. Demand is gradually diminishing but it will take some time before prices come down to a point where demand can be satisfied at lower prices.
Shifting Interest Rates
An increase in interest rates has slowed the seemingly unending stream of buyers and contributed to the changing market.
The Federal Reserve has raised interest rates three times in recent memory, and they are attempting to avoid any further increases. The reason for increased interest rates is that it makes it more difficult to approve mortgage loans. This decrease in the number of available mortgage loans forces people who want to purchase homes to search elsewhere and causes a drop in the number of buyers.
When interest rates rise, it has an immediate cooling effect on the entire real estate market. Despite losing some potential buyers, the remaining buyers have not lost any of their motivation.
Cost of Living
In addition to higher loan rates and qualifications, the cost of living has increased in recent years. This factor is contributing to the changing nature of market conditions.
Rising prices on groceries, gas, utilities and every other little expense that quickly adds up can make it more difficult for buyers to purchase a home. Because lenders are being more conservative in their lending practices due to increased interest rates, an upsurge in the everyday cost of living will force some buyers to completely reevaluate their capability for purchasing a home
Higher living expenses will often force buyers to scale down their home-buying plans and send them back to the listings to start their search from square one and brave the changing market in Chino Hills.
Be Prepared for Aggressive Buyers
Buyers who are able to continue their search unimpeded, as well as those with the time and patience for negotiation, will enter into negotiations ready to make a deal.
Buyers who have been in the market for a few years are accustomed to bidding wars, and they’ll be willing to sweeten their offer with an additional incentive if they feel confident that you will accept their offer. These buyers have experienced one of the most competitive and unforgiving real estate markets in a generation.
The increasing popularity of online wholesaling and local investors has further complicated things for buyers. These wholesalers and local investors are willing to purchase properties quickly and flip them immediately.
Your Professional Guide Through a Changing Market in Chino Hills
Times are uncertain right now, and the combination of uncertainty and fear is scaring a lot of buyers and sellers. Don’t let the shifting market conditions get the best of you! If you want professional guidance to help you navigate the changing market in Chino Hills, contact us today at (626) 347-2441!