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A Volatile Real Estate Summer

Uncertainty Can Lead to Opportunity 
(If You Know Where to Look)

The most recent Fed meeting has created more volatility in the real estate market as mortgage rates ended slightly higher this week. What else is new? It seems that uncertainty has become the new normal. The Fed has been rapidly raising the funds rate by 500 basis points over ten prior meetings and, as expected, they paused rate hikes this week, possibly leaving room for a 25 basis point increase at a future meeting. Not the kind of stuff that instills confidence with buyers or sellers. But as the more savvy real estate investors know, an uncertain market can lead to some great finds—if you are patient and know where to look. But first, let’s consider the playing field.


Consider Some Numbers

Even more telling, over the previous four weeks, in which mortgage rates increased to 7%, the percentage of new listings going into contract immediately has steadily decreased, indicating a decline in immediate demand. Not surprisingly, buyers are wary, and sellers are nervous, the latter leading to price cuts. The number of homes on the market taking a price cut has rapidly increased, with 31.4% of homes seeing a price reduction.


No Time to Take Your Eye Off the Ball

Now is the time to stay engaged. In spite of the anxiety, nothing catastrophic has happened. We’re simply adjusting to a period of higher rates and volatility. There are still opportunities for buyers, especially as many sellers are considering significant price cuts. As for sellers, hold pat if possible, and ride out this wave. Above all, this is a time for both buyers and sellers to stay in daily contact with their Realtor and lender. When a window of opportunity opens (however briefly) you want to be able to act—and act fast. There is no substitute for staying informed.



What Buyers Need to Know

What Sellers Need to Know

What Investors Need to Know

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