“My sellers know that the market has changed. If they want to sell, they have to shift with it or come off the market,” said Lisa Chajet, broker with Coldwell Banker Warburg in Manhattan. “I told a seller, ‘You’re better off taking this deal than waiting around for the next wave of interest rates, which are probably gonna go up again.’”
Despite the massive run-up in rates this year, analysts including Zandi and Wells Fargo & Co. senior economist Mark Vitner expect borrowing costs to hover around this level for the remainder of the year. That would give buyers time to shop.
“If you find the right home and are comfortable with the price and interest rate, go for it,” Vitner said. “If you miss out, it’s not the end of the world. The market is likely to soften up in the next few months.”
Predicting the real estate cycle is a tough game. Lawrence Yun, chief economist of the National Association of Realtors, cautions that timing the market rarely works. For instance, anybody who sold a home at the start of the pandemic two years ago missed out on the skyrocketing values that followed, he said.
Buyers need to have a 10-year horizon and be able to look past the short-term volatility, said Yun.
“This is an opportunity for people with a secure job to jump into the market, when other people are a little hesitant because of a possible recession,” Yun said. “They’ll have fewer buyers to compete with.”
Risks To Waiting
Daryl Fairweather, chief economist for Redfin Corp., said there are risks to waiting as well. If the economy doesn’t fall into a deep recession, it’s possible prices might rise next year, she said.
“I only recommend someone delay if they were already on the fence,” Fairweather said. “Waiting is a fine strategy, but you never know what’s going to happen in the future.”
The calculation is very different for potential sellers. It may be better to put the property up for sale now before more homes hit the market.
“Selling sooner rather than later makes sense,” Zandi said. “I’d bite the bullet, mark down my expectations a little bit, and sell.”
This article was provided by Bloomberg News.