HARLAN GROUP AT KW FLORIDA LIVING
THE BUYERS AREN’T GONE… THEY’RE JUST PICKY
If you’ve been watching interest rates lately, you’ve probably noticed they’re heading in the wrong direction. As of October 1, the average 30-year fixed mortgage rate hit 7.28%.
And naturally, I’m hearing the same thing from buyers: “I’m just going to wait until rates come down.”
I understand the thinking. But here’s the part I want people to consider: what happens to home prices and buyer competition if rates DO come down?
I recently broke down a real sale to show exactly what I mean.
The home was listed at $410,000. My buyer purchased it for $368,500—more than $40,000 below the asking price. Why? Because right now buyers have negotiating power.
With 3.5% down and a 7% interest rate, the principal and interest payment is approximately $2,366 per month.
Now imagine waiting five years. For illustration, let’s assume that the same $410,000 home appreciates just 2% per year. In five years, it would be worth roughly $452,000.
Even if rates dropped to 5.5%, putting 3.5% down on a $452,000 home would produce a principal and interest payment of roughly $2,475 per month.
So you waited for the lower rate, but you’re potentially paying more for the house AND more per month.
Of course, nobody knows exactly where home prices or interest rates will be five years from now. The point isn’t to predict the market. The point is that interest rate is only one part of the equation.
Today’s buyers may have something they haven’t had in years: negotiating power. They can negotiate price, closing costs, repairs and sometimes even rate buydowns. If rates eventually fall and more buyers jump back into the market, some of that leverage could disappear.
And sellers, there’s another side to this.
There ARE buyers out there.
We are seeing it ourselves. When we bring a property to market at the right price, we’re seeing homes go under contract in a week or less. When a home sits with little activity, the market is usually telling us something.
It isn’t always the photography. It isn’t always the marketing. And it certainly isn’t because buyers have completely disappeared.
Price still matters. A lot.
Buyers today are watching every new listing, every price reduction and every comparable sale. When they see a home that represents a good value, they move. When the price doesn’t make sense, they wait.
And our own numbers back that up. Over the last 12 months, The Harlan Group has sold more than 160 homes. Our listings have had a median of 57 days from list date to contract and our average sold price is 95.45% of the original list price.
Those numbers tell me something pretty simple: buyers are still buying. But today’s buyer knows they have choices, and they’re paying attention to value.
So whether you’re thinking about buying or selling in Whiskey Creek, don’t make your decision based on one number.
Buyers: look at the price, payment and negotiating opportunity you have today.
Sellers: price for the market we’re actually in, not the market we wish we were in.
There is still business happening. There are still buyers buying. And the homes positioned correctly are still selling.
As always, if you’d like to know what your Whiskey Creek home could realistically sell for in today’s market, not a Zestimate and not a number pulled out of thin air, give me a call.
Jessica Nolan & Erin Harrel
Jessica is a Whiskey Creek Resident | WCCA Board Member
Harlan Group Real Estate at KW Florida Living
