The major headline topic lately is interest rates. The last quarter of 2022 was “strange” and caused some buyers and sellers to hit the pause button. They were waiting for a sign of where the market was heading. The Federal Reserve was hiking rates at a pace never before seen and the uncertainty was too much for some. Uncertainty is not a friend to the real estate industry and it’s especially noticeable in the Midwest. While rates continue to fluctuate up and down, buyers have adjusted to this new normal and they are in it to win!
Home values continue to push upward. The Feds attempt to slow inflation is not showing to be productive in our local real estate market. As of May 6, 2023, the average sales price year-to-date in our local market is $248,945 (up from $232,971 a year ago). To further display how high values have pushed, the average sales price in the Jefferson City Area Board of REALTORS® as of May 6th, 2019 was $166,735! I know some of you just thought, “get ready for a market crash.” Although our average sales price has pushed up nearly $100,000 in 4 years, there are no indications of a “crash.”
Why? A few reasons. Never before have homeowners had more equity in their homes than they do now. If an owner is in a positive equity position, they’ll sell and cash out instead of letting it go back to the bank. Also, lending protocols prior to 2008 were very loose which fed the market crash as opposed to increasing home values.
Bidding wars are back and show no sign of leaving any time soon. Inventory momentarily showed signs of growth and bidding wars slowed a bit during that time. However, inventory has retracted yet again, and the pressure is on. Buyers must remember that pricing strategy will vary among listings and they will need professional guidance to ensure they are not overpaying. Despite values pushing up, not every single listing receives a bidding war. A buyer should not approach each listing with the same offer strategy. Our team has keyed in on the specific market indicators for which listings will push up and which ones are likely to linger on the market.
My advice is pretty simple. Buy if you want to buy and sell if you want to sell. Make sure you are considering your personal needs and wants, and not being guided by the national news. I believe we will see some markets around the nation simmer down, but all real estate is local, and some markets show no signs of slowing down. We are monitoring market trends closely and ensuring we provide the most up to date and customized advice for each individual client. If you have questions about how this market affects you personally, I’m happy to discuss your goals.