What to do about Federal rate hikes

Federal interest rates may impact buying and selling homes, but we provide answers on what you need to know.

As interest rates continue to increase upwards, how is that going to affect the real estate sales market?

KATIE'S ANSWER

It's going to significantly decrease the amount of buyers who are going to be able to afford today's housing prices. It is technically still a sellers' market in the Columbus Area with just over a month's supply of housing inventory on the market (September 2022 Local Market Update from Columbus Realtors®). When we are at a neutral market, the month's supply of housing inventory will be 6 to 7 months. We are still a long way away from those numbers. Days on market have increased as well going from 2 weeks to nearly 20 days.

SELLING

If you are thinking of selling, this change is not something to fear. It's just going to mean a lot more patience is needed to find the right buyer. Gone are the days of 40 to 60 offers on a home. However, gone are not the days of the potential of multiple offers. The game has changed and new tactics are needed to ensure you get the best price.

BUYING

If you are buying, you have an advantage over the buyers who tapped out of the market. You will get a great price on a home and when rates go down refinance to take advantage of the price you received. The competition has settled and you aren't dealing with the frenzied $50k to $60k over list. However, there is still a chance that multiple offers to be present; but, the game of winning a home has changed where you are not signing over your first born's name to get it.

SUMMARY

Real Estate is a long term vision game, in my opinion, when it comes to personal owning. Residential Investing - Rentals and Vacation Homes, well that is a different matter all together and another topic for another time.