Navigating a Unique Housing Market (Podcast)

A challenge for home buyers and sellers

The housing market’s unique and unprecedented conditions can make it challenging for both home buyers and sellers.

In this podcast, Craig Berry discusses the state of the housing market and provides insights on how to successfully navigate it. He is joined by Brad Nix, the CEO and co-founder of Path & Post Real Estate, based in the Atlanta metro area.

Even after seeing the various ups and downs of 25 years in real estate, Nix emphasizes that the current market is unlike anything he has experienced before. While some draw comparisons to the 2008 housing collapse, Brad points out that the underlying fundamentals and reasons for the market’s conditions are different.

Here’s what they had to say on a recent episode of The Mortgage Reports Podcast.

Listen to Craig on The Mortgage Reports Podcast!

Adaption and preparation

This podcast highlights the hardships buyers and sellers face. Buyers may have difficulty finding suitable homes due to low inventory levels and high competition. On the other hand, sellers may be hesitant to list their homes due to concerns about finding a new property in a competitive environment.

Nix emphasizes that it is crucial for both sides to adapt to market conditions and be prepared for the challenges they may encounter.

He suggests that buyers should be proactive in their search, working closely with real estate agents to identify potential properties and act quickly when they find a suitable home. It may also be beneficial for buyers to be flexible in their criteria and consider properties that may require some renovations or updates.

For sellers, Nix advises pricing their homes competitively to attract buyers in a crowded market. Additionally, they should be prepared to act swiftly when offers come in, as buyers may have multiple options to choose from. Working with an experienced real estate agent can help sellers navigate the complexities of the market and ensure they make informed decisions.

Choose an agent wisely

With the right strategies and guidance from experienced professionals, it is possible to navigate this market successfully. By being proactive, adaptable, and working closely with real estate agents, individuals can overcome the obstacles and find success in their real estate endeavors.

Selecting an agent based on results and reviews is crucial. With the market being in a state of flux, it is important to make an informed decision. One of the biggest problems consumers face is that they will pay the same amount for a great agent as they would for a terrible one.

Borrowers should look for two key things when selecting an agent. The first is results. The real estate industry is full of promises, handshakes, and assurances. However, it is important to go beyond the lip service and ask for result-based evidence. Buyers and sellers should ask agents to show them where they have achieved success in the past with data to back it up. This will help determine if the agent has the track record to meet your expectations.

The second key thing to look for is reviews. In a review-centric world, it is essential to check the reviews of agents, the team they work for, and the brokers they are associated with. Just like people don’t buy toothpaste on Amazon without checking the reviews, consumers should not enter into a real estate agreement without checking the reviews of their agent. Reviews provide valuable insights into the experiences of past clients and can help gauge if the agent is trustworthy and reliable.

When it comes to verifying reviews, there are two reliable sources: Google and Zillow. These platforms have rigorous analysis processes to ensure that the reviews are legitimate. They require consumers to create accounts and provide a level of trustworthiness.

First-time buyers may especially struggle to understand what they are getting into. They may not be aware of the potential pitfalls or the complexities involved in the buying process. This lack of knowledge makes it essential for buyers to trust their agents. However, trust must be earned, and that is where an agent’s experience and credibility come into play. Buyers should look for agents with a solid reputation and a history of successfully guiding clients through the process. Without a competent agent, buyers may find themselves in a difficult position, potentially losing money or not getting the home they expected.

In a seller’s market, sellers often think that they don’t need an agent because anyone can sell a house during a favorable period. However, it is important to remember that agents don’t sell houses. Rather, they facilitate, consult, and protect their clients through the process. They are responsible for negotiating on behalf of their clients and ensuring a smooth transaction. Therefore, even in a seller’s market, it is crucial to have an experienced agent who can maneuver through complexities and protect the seller’s interests.

The four key factors important to sellers are timing, money, certainty, and convenience. Selling a home is not just about the final price; it is also about the process leading up to the sale. Sellers want to know if the buyer is qualified and capable of closing the deal. They also want to avoid any unnecessary repairs or renovations that may hinder the sale. Having an agent who can address these concerns and provide certainty and convenience is crucial.

It’s also notable that no two real estate transactions are the same. Every property is different, and each buyer and seller has their own set of goals and priorities. This ever-changing environment requires a real estate professional who can adapt and navigate the challenges that arise. An experienced agent with a proven track record is more likely to have encountered unexpected situations and knows how to handle them effectively.

Reading the housing market’s volatility

Higher mortgage rates, elevated home prices, and limited inventory all contribute to the housing market’s volatility. Additionally, there is a fear of ongoing inflation, impending recession, and more interest rate hikes. All of these factors combined create uncertainty and make it difficult for potential buyers to determine whether it is a good time to buy.

Berry emphasizes that it’s not a one-size-fits-all answer and the best time to buy or sell depends on each individual’s situation. Factors such as the reason for moving, finances, and long-term plans need to be considered before making a decision.

Having a deeper conversation with a knowledgeable agent could help you determine if the timing is right for you. An agent who is willing to understand the individual’s situation and goals can provide valuable insights and guidance by assessing the risks and benefits, and providing an objective perspective.

Berry and Nix also address that we are unlikely to relive 2008. While unforeseen events can always occur, the current projection suggests that the market is close to stabilization and may even be at a plateau before heading up in the future. This viewpoint differs from the “doomsdayers” who predict a decline in home prices.

Interest rates’ impact on home prices

Rising interest rates have led to a pullback in the housing market. The Federal Reserve’s efforts to fight off inflation have caused a decrease in home price growth.

However, if mortgage rates were to drop, home prices would likely go up. Many potential buyers are currently sitting on the fence, waiting for lower interest rates before making a move. A drop could lead to increased demand and subsequent appreciation of property values.

The problem with the current market is an ongoing lack of supply. Increasing demand without a corresponding increase to for-sale inventory could exacerbate the problem and potentially lead to further price jumps.

Affordability is another key issue, especially for first-time home buyers. Many people who were pre-approved for a mortgage six months ago may no longer qualify for the same amount due to affordability constraints. Solving the affordability issue requires addressing both the supply side and potentially finding long-term solutions as a country.

Advice for home buyers

When making one of the biggest financial commitments of your life, it’s important to work with the right people.

Knowing how to find a great real estate agent could help get you the best deal and navigate a tricky market, no matter if you’re a buyer or a seller.

If you’re ready to list or purchase property, reach out to a local lender to see what interest rate and loan types you qualify for.