Learn About the Variants of the Volatile Real Estate Market
In the past year, the real estate market has been incredibly volatile. Since 2021, rapidly rising demand has caused real estate prices to soar to record highs. The result has been a seller’s market where buyers are facing asking prices that would have been unthinkable before the COVID-19 pandemic. The rise in prices is not limited to just housing. Due to record inflation after the pandemic, the cost of goods and services has skyrocketed across the board. With the United States Federal Reserve planning to further increase interest rates into 2023, there are no signs of inflation cooling off anytime soon. Record high inflation and soaring interest rates are only two factors that will affect future real estate prices. There will be many more to consider. One of the factors which increased real estate prices during the COVID-19 pandemic was record-high unemployment. According to the Counselors of Real Estate, nearly 40 million Americans filed unemployment claims for the first time in the spring of 2020. Market volatility grew to levels not seen since the 2008 financial crisis. That led to the implementation of stimulus policies designed to support consumer spending. At the same time, the United States Federal Reserve lowered its overnight lending rate to zero. With interest rates low, consumers began to borrow money in droves. Since interest rates were previously so low, consumers could still afford mortgages even though asking prices for properties had soared to record highs. After the implementation of those policies, we have witnessed record inflation. Prices of goods and services have not soared at this rate in several decades. That is partially due to a rapid increase in the consumption of consumer durables as opposed to non–durables. According to the Counselors of Real Estate, consumption of consumer durables (long-lasting items like furniture) increased by nearly 40% between the beginning of the COVID-19 pandemic and the spring of 2021. At the same time, the consumption of non-durables (eating out, etc.) had only increased by 14%. When the United States Federal Reserve implemented the stimulus policies during the COVID-19 pandemic, they anticipated an inflation rate of 2%. Throughout 2022, we have seen monthly rates of inflation exceed 8%. With this in mind, the United States Federal Reserve has turned its primary mandate away from fostering maximum employment to fighting inflation. As a result, the United States Federal Reserve voted unanimously to raise interest rates to 3.15% in September. With no signs of inflation diminishing soon, the United States Federal Reserve could raise interest rates as high as 4.6% by 2023. According to the Counselors of Real Estate, the volume of real estate transactions is likely to remain high into 2023 despite these hikes in interest rates. The only question is whether a recession driven by record-high unemployment and lower household incomes will kill the demand for housing and lower the volume of real estate transactions. There are many other factors to consider to determine where interest rates and inflation will trend concerning real estate supply and prices. The first of which would be a geopolitical risk. Events like the war in Ukraine and the ongoing COVID-19 pandemic in China undoubtedly have a massive effect on the supply chain and prices of goods. Russia and Ukraine are responsible for roughly 30% of the world’s wheat supply. In addition, most of the world’s metals like aluminum, nickel, and copper come from these countries. These are metals used in many industries. When combined with supply issues for electronics coming out of China, most economists project shortages for many goods and services within the coming months. With rapid inflation in prices for consumer durables and non-durables, it is unclear whether these price hikes and supply chain crunches will cause consumers to prioritize these needs over real estate. The real estate industry has experienced a supply crunch for several decades. According to the Counselors of Real Estate, one new housing unit had been created for every 1.2 jobs during the late 20th century. As recently as 2010, that imbalance had grown to one unit for every 2.6 jobs. Along with nearly 40 million Americans quitting their jobs and relocating, this is what likely led to the severe hike in housing prices during the COVID-19 pandemic. According to the council, nearly 4 million units both available for rent and for sale will need to become available by 2035 in order to accommodate the increase in demand. A supply crunch and increased demand would lead to further price increases, but the question of whether inflation and supply chain crunches for other necessities will kill demand for housing still remains unanswered. With growing uncertainty for the future in terms of inflation and interest rates, real estate prices will continue to fluctuate with these trends. With geopolitical risks around the world exacerbating inflation, the prices of many consumer goods and services will increase, and the demand for real estate could plummet. Economists anticipate future shortages of food, gas to heat homes in the winter, and other factors which will cause consumers to reprioritize in favor of their necessities. In addition, the upcoming hikes in interest rates from the United States Federal Reserve will render it increasingly difficult for home buyers to obtain affordable mortgages. Given real estate prices are higher than they’ve ever been and that real estate is an increasingly scarce commodity, buying a property could be one of the most secure investments to make at the moment. Real estate prices are still stable concerning the crumbling stock market, and housing has a record of being underbuilt in the United States for decades, so it will still be a valuable asset to hold onto in the future. The United States Federal Reserve is also considering raising interest rates as high as 4.6% in 2023, so this is the best time to secure a mortgage before interest rates spike. When navigating the real estate market amidst uncertainties with inflation and interest rate spikes, you don’t want to try it on your own. By consulting with a seasoned real estate agent, you can understand the market, determine accurate prices you should be paying for a home, and whether you should buy given current market conditions. Your real estate agent could also help you to obtain an affordable mortgage at the best possible rate before the United States Federal Reserve decides to hike interest rates higher than they were in September 2022. If you’re a buyer experiencing concerns with interest rate hikes and inflation leaving you unsure where to turn in the current market, I can help. I help Arizona residents navigate the real estate market, find a home suitable for their needs, negotiate a price they can afford, and help them secure an affordable mortgage. Most importantly, I help Arizona residents find a home suitable for their future and their families. Contact me below if you’re ready to find a home that’s right for your needs at the right price.
Position Yourself in the Real Estate Market Before It’s Too Late
Housing prices are booming. Demand has exploded in the last year and has shown no signs of settling down anytime soon. Interest rates are currently at an all-time low, which makes it easier for buyers looking to secure a mortgage and current homeowners with refinancing despite these high prices. At the same time, inflation has skyrocketed for the last several months, which has driven prices of all other goods higher than ever and reduced the buying power of average Americans. To try and combat this issue, the United States Federal Reserve has voted unanimously to raise interest rates starting this month. That means it will not be as easy for buyers to secure mortgages they can afford. Also, current homeowners will likely be stuck with their current interest rates. When you combine all that with the fact that those efforts to fight inflation won’t necessarily reduce prices, you have the recipe for one of the best investments you could make today buying a home. Experts have quantified how much missing out on this golden opportunity could cost you. Experts estimate that with projected mortgage rates rising from 3% to an average of 3.55% by next year, the average 30-year mortgage will cost $107 more per month for the borrower in interest alone if they wait until 2023 to secure a property. The rise in interest rates isn’t going to stop there. Experts also project that the federal reserve could raise interest rates to as high as 4.6% before this war on inflation is remotely close to being over. That would make that extra $107 per month look paltry compared to what it could look like if you were to wait to buy property until then. Before 2023 arrives and before additional interest rate hikes, there are still ample options for buying a home despite being amidst a seller’s market. Because we are navigating a seller’s market, demand for homes will likely not decline soon. That means that the prices are also not going to either. Luckily, that makes housing one of the most stable investment vehicles to which you can allocate your assets for the foreseeable future, especially when you consider how volatile the prices of other assets have been after recent market declines. Here are some steps you can take to make sure you get the most out of your investment: Obtain Pre-Approval From a Lender Before You Start Looking at Properties Given that home prices are soaring to all-time highs, most buyers are not likely to pay cash. After interest rates have already jumped and further rate hikes are imminent, it will become increasingly difficult to secure an affordable mortgage. If you obtain pre-approval from a lender before looking at properties, you can lock in current rates before the hikes and be as ready as a cash buyer. There’s a significant difference between being pre-qualified for a mortgage and getting pre-approved. Getting pre-approved by your lender is a surefire way to position yourself ahead of most buyers and secure your investment before this buying window closes. Have the Property You’re Looking at Inspected Thoroughly Before You Buy When making large purchases such as a home, be sure you’ve done your homework. The last thing you want to do is to get pre-approved for a mortgage during this buying window only to find out the house you purchased has turned out to be a money pit without your knowledge. Having the property inspected before you buy ensures that you know what you’re getting into and that you’re using this opportunity with lower interest rates on a sturdy house. Avoid Blindly Trusting the Seller’s Asking Price These days, home prices are becoming absurd. Because demand for housing is so high and the supply is so tight, sellers can get away with asking prices that would have previously been laughable. Even though market prices are higher than ever, you don’t want to assume that a seller’s asking price is inherently the market price. By consulting with a real estate professional, you can easily navigate the current housing market and ensure you find a good deal. Investigate the Surrounding Area and be Sure it Accomodates Your Lifestyle Do you have a family? If so, you’ll want to know what the schools are like in the community near the home you’re looking at buying so you can ensure your child receives proper education and thrives in their environment. Who are your neighbors? Are they people you would likely get along with, or would you have problems with them? How close is the property to your employer or the grocery store? If you’re going to commute, is there ample public transport, or are the roads smooth so you can avoid damaging your vehicle? These questions will massively impact your experience in your home, so you’ll want to investigate the surrounding area thoroughly and be sure that it accommodates your lifestyle and suits your needs. Don’t Let the First Impression Cloud Your Judgement Appearances can be deceiving, especially in a world where we now have access to online platforms to search for properties. Most listers overlook the importance of hiring a photographer and posting quality photos of the property they’re listing. That can make the property look far worse and turn off most buyers. On the other hand, a property may look great at first glance only to be plagued with structural problems and located in an area undesirable for your needs. Don’t let your first impression cloud your judgment. You could be walking away from what could otherwise be a great property or walking into a money pit without knowing it. That goes back to taking advantage of inspections and doing your homework before pulling the trigger on a property. Know Your Rights and Understand Your Obligations Before You Sign on the Dotted Line Not understanding your obligations to the seller or your mortgage broker could land you in some deep trouble. The last thing you want is to end up in a legal battle over a contract that you don’t understand for which you haven’t fulfilled your obligations. In the event of a breach of contract on your part or another party involved in the sale, you also want to understand your rights as a buyer/homeowner. To ensure that you understand the contract thoroughly and that everyone holds up their end, you can consult with an attorney who will walk you through this process. Trust an Expert Rather Than Attempting Everything on Your Own When buying a home, there are many variables, especially in the current market. With inflation at an all-time high and record-low interest rates disappearing, these next few months could be one of the last opportunities to obtain one of the most secure investment vehicles on the market affordably for the foreseeable future. According to experts, positioning yourself ahead of further rate hikes in 2023 could save the average homebuyer $107 in interest on their mortgage monthly. With this in mind, you want to consider many variables to ensure not only are you getting a great deal but also how you can avoid most headaches that come with purchasing a new home. While weighing your best options, you should not do so by yourself. Turn to a real estate professional you can trust. If you’re looking at securing one of the best investment vehicles available today for yourself and are unsure where to turn, I can help. I specialize in finding properties perfect for the needs of Arizona home buyers, getting them pre-approved for affordable mortgages, and walking them through the buying process so they can avoid all the headaches that come with such a purchase. Contact me today if you’re ready to find the right home for you and take advantage of the last great buying opportunity for the foreseeable future. Contact me today for more information https://thetoddmorris.com/
How to Strategically Sell Your Luxury Home
A luxury home has its own set of nuances involved with the listing procedure that does not apply to any specific property. We'll go through the things you should know about a real estate agent's work in Arizona when selling your luxury house. Develop a well-thought-out marketing plan An experienced luxury real estate agent develops a distinct and individualized marketing strategy for each property. A boilerplate marketing plan is a standard practice among high-end real estate agents. However, there should be some elements that are distinctive to your luxury property’s overall narrative and concept.High-end houses or apartments require a distinct approach to promotion. Your target purchaser is very unlikely to be strolling aimlessly into open houses or flipping through the real estate classifieds without purpose. They could live in another city, state, or even country and may only be around during the summer months. That's why a professional realtor uses a variety of creative methods to ensure that as many potential customers as possible can see your top-of-the-line property.The Internet has made it much simpler than ever for high-end homes to be discovered by a large audience across the country and around the world. A competent luxury realtor has their own website and employs cutting-edge marketing methods. According to Statista, an online statistics and market research platform, ninety-nine percent of Americans between the ages of twenty-three and fifty-six look for information about new houses online. So it’s no wonder the top luxury real estate agents invest in the best internet marketing strategies to sell your high-end property. Learn what sets your luxury property apart When a competent realtor opens the discussion about potentially marketing and selling your property, they will first inquire about your preferences as well as the distinguishing features of your home. Your agent needs this information to generate a creative and competitive marketing strategy.A premium real estate agency will construct a compelling narrative around your home, tying all of its features to one central theme tailored to appeal to luxury buyers. The agent may advertise your custom home by giving it a unique name. Whether or not your luxury property has an official title, ensure your agent knows the details of the property inside and out. Determine a target group The best luxury realtors understand that they are not only selling a house; they are selling a way of life. The campaign's theme should reflect this.Perhaps your house in Scottsdale is ideal for a golfer. Or it's perfect for a family that likes to have fun. Any special characteristics should be highlighted in your home's marketing and are important to locate the right buyer category. There are numerous options to focus on specific audiences nowadays, and a high-end realtor knows them very well. They discover which demographic would be most interested in your home and run advertisements geared toward this group. Create the unique story of your property When an experienced real estate agent comes to appraise your luxury property, they're not only interested in the square footage and number of bedrooms; they want to know about the history of the house and its previous owners. A good story can make all the difference when selling a high-end home.The luxury real estate professionals know how to capture the attention of those who believe that this property was custom-built for them and their requirements and have the financial means to acquire such a magnificent home. They must track down the story of the property in order to accomplish this.This is why top real estate agents may want a thorough room-by-room tour of your property, requesting information and even anecdotes regarding the home's construction or special memories associated with it. Professionally stage your home Some high-end properties feature interior designs that have been professionally and artistically created. A top luxury real estate agent will consider what your potential purchasers may anticipate seeing, focusing on the outside spaces, formal dining areas, bathrooms, and living areas. The objective is for buyers to picture themselves indulging in a Sunday dinner at the table and summer barbecues in the garden, all while feeling a part of the house's history. Get ultimate online exposure The majority of real estate agents can simply ensure that your property shows on Zillow.com and Realtor.com real estate websites. However, today's high-end homes should also be advertised online with a prominent listing on the real estate agent's website and blog.When your luxury agent understands what makes your property stand out from the rest, this information might be utilized on social media to attract more people. Your home should be featured on your realtor's website and social media, using the appropriate keywords and hashtags to effectively attract the luxury market. Provide a high-quality picture A luxury real estate agent employs the help of a professional photographer to properly display your property. This person brings your home into the best possible light and provides an appealing HD video tour.Excellent photographs are more essential than ever before, as internet exposure is becoming increasingly vital to the sale of your property. Clients will evaluate your home based on the photographs. The best luxury agents employ the services of a top-rated real estate photographer. They will also be present during the shoot to ensure that the necessary comforts and characteristics are emphasized.Real estate marketing professionals often use video tours to promote luxury properties. Online listings usually limit the number of photographs that can be included. But linking to a video that shows the entire home and how it works from room to room helps to avoid these restrictions. Receive an expert home evaluation A knowledgeable luxury agent provides data to support their pricing suggestions. It should be clear in their comparative real estate market analysis that they have spent a significant amount of time evaluating your high-end home and researching the local market. Ideally, the pricing report should include information and statistics on the absorption rate in the region and within the price range so you can evaluate how fast houses of a similar category are typically sold.Check to see if your realtor overlooked any of these crucial features in the luxury market: smart home features, kitchen gadgets and gizmos, outdoor entertaining facilities, steam showers, spa bathtubs, landscape design, etc. Your real estate agent may hire a specialist appraiser to assess your home, simply to obtain a price range or touchstone. This point is crucial. If a luxury house isn't priced correctly from the start, it may influence both the timing and total price of the sale.As a seasoned luxury real estate agent, I recognize the significance of this stage; therefore, I provide in-depth knowledge of the Arizona real estate market in the home evaluation report, which you may obtain by completing a brief form here.
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