Gain an edge in San Diego's real estate market amidst rising rates.
Are you considering listing your home soon in an environment with interest rates at 7% or 8%? This presents challenges for both buyers and sellers. Today I’ll share the impact of interest rates on the real estate market and delve into practical tips and strategies to thrive in these challenging times.
In San Diego’s real estate market, we’re witnessing interest rates climbing above 8%, causing many potential buyers to wonder what steps to take. For sellers, uncertainty looms large. Questions arise about who will visit their home, whether they’ll receive top dollar, or if they’ll need to make substantial discounts or concessions.
Let’s consider the impact of interest rates on buyers’ purchasing power. For instance, on a $1,000,000 home, a mortgage at 7% amounts to $5,322 per month. However, with rates at 8%, the monthly payment leaps to $5,870, a $550 difference. This shift reduces a buyer’s purchasing ability by $50,000 to $75,000.
Consequently, a home priced based on older market data from lower-interest-rate periods struggles to attract attention today. Properties aligned with current interest rates not only sell faster but often at higher prices due to increased buyer interest.
Sellers need to adjust their pricing strategy. Unlike past years where pricing higher could attract buyers, the current market demands a more cautious approach. While inventory shortage is real, homes priced incorrectly linger unsold for extended periods, disappointing sellers.
Buyers today are extra cautious due to rate increases. So, getting the price right is crucial for attracting the right traffic. Working with a knowledgeable real estate agent who understands both past sales and current buyer trends becomes imperative.
For more insights and strategies on navigating the real estate market successfully, don’t hesitate to call or email me. I’m always happy to help.