There’s good news for buyers in today’s real estate market: low interest rates and current market conditions can translate to more opportunities and some room to breathe.
Mona Spencer, branch manager for John L. Scott’s Redmond office, said depending on the location, the local market is strong and properties can still garner multiple offers.
However, Spencer noted that in May’s market, additional inventory has paved the way for buyers to take a bit more time and breathe throughout the process of purchasing a home. Brokers in the Redmond office have been seeing more buyers get contingent offers accepted, meaning they write the offer contingent on the sale of their existing home. Adding contingencies such as inspection and finance are also included in more of the current offers, reducing risk for buyers.
“Currently, buyers have more inventory to choose from,” said Spencer. “Generally speaking, we’re noticing that buyers are more analytical and thoughtful before they make their decision, mainly because increased inventory in many areas has given them the time to do so.”
Another element benefiting homebuyers is interest rates — which are currently are less than four percent. The lower the rate, the more buying power consumers have when entering the market. However, buyers are not the only group impacted by interest rates.
“People typically think of homebuyers as the group benefiting from low interest rates,” said Spencer. “However, home sellers will often become buyers once their home sells, and people who are choosing to stay put may look to refinance if the conditions are right.”
According to Black Knight, a mortgage software and analytics company, this unexpected and sharp drop in mortgage rates means there are now approximately 5.9 million borrowers who could see their rates drop by at least 75 basis points by refinancing their mortgages. This is an increase of 2 million in just the past month, making it the largest population of eligible candidates for refinancing in nearly three years.
Spencer recommends that homeowners exploring the possibility of refinancing connect with a mortgage professional to determine if it is the right choice for them. She also recommends, that if looking to purchase a home before the next school year starts, working with a real estate professional who will help get all the pieces in place to succeed.
“This time of year, parents are typically very busy with graduation and other activities associated with the end of the school year,” said Spencer. “However, it’s not too late to make a move before the school year starts. A broker can ensure you’re in tip-top shape to make the process as smooth as possible.”
Even for buyers who do not have children on their radar, it’s still important to put an emphasis on school district when weighing the pros and cons of homes, Spencer said. John L. Scott’s school search function is one way to explore homes in the boundaries of top schools, and a GreatSchools ranking appears next to each listing, which is an easy way to note school quality at a glance.
“Location is key for home values – it’s important to consider the school district of a home as well as proximity to job centers, entertainment and hospitals,” said Spencer. “Homes with a great combination of all of these elements hold their value and appreciate at a higher rate. Working with a broker can help, as they’ll do helpful research and can provide statistics on local schools and amenities.”