Summer is in FULL SWING, Just like the Real Estate Market!

By Matt Trudel

There are about the same number of single-family houses currently for sale in Windham as there are single-family homes under contract. Inventory is slightly up over the last month, however the amount of buyers out looking has increased as well.

This means that competition is still strong with buyers often competing on the same property. How is this still happening with interest rates being close to 7 percent for a 30-year fixed rate? Let’s take a closer look at what is really happening and how we might just be overthinking things.

First let’s talk about interest rates and how they are affecting the market both negatively and positively. Yes, 6.75 percent is not what people would say is a good interest rate. People will say that they have a 3 percent interest rate, and 6.75 percent is absurd. That is the COVID or post COVID interest rates that all of us got spoiled with for several years. All of us got trained that 3 percent was the new normal and is what we should expect if we have good credit scores and solid loan history.

That is a fair statement, but isn’t it also a fair statement to say 6.75 percent was a pretty good rate less than a decade ago? Certainly, the low 6 percent range was a very good rate. Everyone got spoiled with those extremely low rates, which by the way, are not sustainable in any market or business.

The second factor that hasn’t changed in the past six or seven years is the demand and need to purchase a home. People need a place to live, and many don’t like the idea of renting and not investing in their own future. The population continues to grow, people change jobs, get married, get divorced, and sometimes it is just that they are becoming adults and want to invest.

The list is endless, and the demand is strong, but the inventory is not endless. Pricing is still strong even with the elevated interest rates. So, if pricing is remaining strong, and interest rates are higher, how are buyers managing to purchase homes when the purchasing power they have is lower because of the higher interest rates?

We are seeing the younger generation show some real creativity and determination in deciding that they would prefer to purchase a house rather than pay the escalating rental prices. I have seen three friends pool their funds for a down payment and all three of them purchased a home together so they could share expenses. Their plan was to invest in a property together so they could hopefully make a little money down the road, but more important was the money they could save themselves and build their own savings to prepare for their next purchase on their own.

I had a very young couple, girlfriend and boyfriend, who also opted to do the same. This is always a little risky making such a big purchase together when things can change quickly in a relationship. They had thought this out and had an agreement in place just in case that did happen.

There are always ways to get things done when you really want to accomplish something. My last example is a client who really liked the house we looked at. We were the first showing, and she loved it. I explained it was easily worth $60,000 more than they were asking, and we should move quickly and aggressively.

We did just that and had it under contract later that afternoon before too many other buyers could see it. The other agency was not super cooperative in the process, and we later learned about all the offers they had over and above ours. We had a clean offer which was $60,000 over asking. Even without the listing agent or the seller’s cooperation we accomplished our goal and closed on my clients’ dream home.

Being creative and having experience can make all the difference in your success in a real estate transaction. Make sure you have a realtor who has both in your next transaction.

This article was written by Matthew Trudel, Owner of Five Star Realty, Windham, 207-939-6971. <