As inflation rises across the country, interest rates are increasing as well. Many buyers took advantage of low rates in recent years, but that trend did not continue into 2022, and many experts predict that rates will rise even higher in 2023. If you’re wondering how this will impact the market for Grand Traverse County luxury homes, you’ve come to the right place. This article will explain the implications for both buyers and sellers to help you determine whether or not this is the best time for you to make any transaction.
1. What factors affect interest rates?
Interest rates can vary based on factors such as current inflation levels and the condition of the stock market. Many people know that inflation is as high now as we’ve seen in several years. However, the number shot up to 7% in 2021 and is on pace to finish significantly higher in 2022
. The effects of inflation carry over into the stock market, where volatility abounds, and portfolios continue to decrease in value.
2. Does everyone receive the same interest rate?
No. Mortgage rates vary depending on which lender you work with. Your specific rate also reflects your credit score and loan-to-value ratio. While these factors are things you can control, other factors outside your control
can impact the rate you’ll receive on your loan. For this reason, it’s wise to talk with multiple lenders when securing a loan for any purchases of Grand Traverse County luxury homes. This ensures that you get the best possible deal.
3. What’s the current landscape of the Grand Traverse County real estate market?
In many ways, the Grand Traverse County market remains a seller's market. Home prices continue to climb, and about half of homes sell at or above asking price. However, homes spend more time on the market than they did one year ago, with most homes spending between 30 and 90 days on the market. However, some homes will sell in less than a month, and these are usually the properties that can receive multiple offers or sell for a price above asking.
4. How does the national housing market compare to the Grand Traverse market?
Over the past year, median sales prices have climbed across the nation, but not quite as much as homes in the Grand Traverse area
. Homes commonly receive multiple offers, and many will sell above asking price.
Experts predict home prices may remain consistent or dip slightly over the next twelve months. This may surprise some people since the market has been hot over the past few years. At the same time, experts do not believe we will see a full-on market crash like many still remember from 2008. That’s good news for potential sellers, and it’s also a cautionary tale for buyers who hesitate because they’re waiting on a bargain.
5. Is this a good time to buy a home?
At first glance, potential buyers may balk at exploring the market because they don’t want to get locked into a higher interest rate. However, this may still be a good time for you to invest in a property. For starters, the longer you wait to buy a property, the longer it will take
for you to build up equity in a home. Also, there’s a good chance that interest rates will continue to rise in the near future, so waiting on a good deal may result in you spending more on interest throughout the life of your loan.
That said, there are other important factors besides the current interest rates. First of all, what’s your credit score? Will you be able to get the best possible interest rate from a lender who sees you as a safe and viable candidate for a home loan? Also, do you have enough money saved up for a down payment? The more money you bring to the table, the less of a loan you’ll have to take out.
6. Is this a good time to sell a home?
As previously mentioned, rising interest rates and growing inflation may contribute to a minor stall or freeze in the market. It’s unlikely that home prices will increase in the near future, and they may even take a slight downturn. However, they have risen substantially over the past two to three years, so there’s a good chance you can maximize your investment should you choose to sell. Depending on your situation, you may have to use your profits to lock yourself into another home at a higher cost and interest rate. You’ll have to decide whether the benefits outweigh the costs in your situation.
7. What should I do next?
While rising interest rates are worth noticing and will impact the market, they shouldn’t discourage you from buying or selling Grand Traverse County luxury homes when you feel motivated to do so.
One trick to navigating through a rapidly changing market is to partner with an experienced real estate agent who can give you up-to-date information on current events and advise you on how to proceed accordingly. For many individuals who plan to buy or sell Grand Traverse County real estate, this person is Molly Buttleman
. Molly specializes in luxury real estate. Her wide range of contacts and extensive knowledge of the best local communities have made her a valued resource for individuals handling real estate transactions in Grand Traverse County. She would love to partner with you through buying or selling your home. Reach out to Molly here
*Header photo courtesy of Molly Buttleman Real Estate