A Window for Buyers?
The late days of summer are full of news about growing inventories of listed homes, more price reductions, and stock market volatility. That said, the first meaningful reductions in mortgage rates in 2024 offers the prospect of future savings in financing costs.
Joe Taggart’s recent blog talks about the correction in house prices in real terms over recent years, arguing that housing is still scarce and so likely not overvalued. Slater’s analysis of elections and real estate suggests that while the Fall may be slower with historic cyclical factors supporting a stronger market in 2025.
How does all this stack up?
This is an opportunity for buyers: more choices of what to buy, at more concessionary terms, than in some time.
Some sub-markets remain competitive, while others, particularly at the high-end, feel quite sluggish.
We’ve recently seen more buyers walking away from deals at the high end of the market. As a veteran colleague noted with renovation costs coming in at “twice the budget and twice the time”, qualified buyers have pulled the plug on purchases where the work was just too much.
Talking to the wealth advisory community, an after-effect of the COVID era among clients is a focus of the value of time. Rick Tyson of Fiduciary Trust observed, “Renovation projects don’t just cost money. They take away time. We see clients taking vacations together, or choosing to rent, rather than waiting two years to be together at a property. By then, the kids are older and the family needs may have changed.”
For well-informed buyers, this can be a window of opportunity, particularly if they can partner with great contractors and architects, making for a shared creative endeavor.
The prospect of refinancing at lower interest rates in the future is enticing as well.
Another arrow in the quiver for smart buyers is a back-up bid. Stepping in to save the day if a deal falls apart can make for a grateful seller and advantageous terms.
Once again, it is key to be well-informed.
An advantage to LandVest is our broad geography and narrow demography. We focus on the high-end across multiple states and share information with our clients across regions. In luxury markets, value is determined across regional markets, not just locally.
The value of property that is “want to buy” as opposed to “have to have” is far more influenced by broader factors like wealth and risk appetite as we have noted in previous blog posts.
Presently the alignment of risk factors may be in the favor of buyers, whether they are in the position of “want to buy” or “have to have”. We are here to help!
More to come!
