You May Have Heard About A National Shift in the Housing Market--How Does That Affect Louisville?
Should you sell your home? Should you be on the market looking for a home? Find out all the answers from Principal Broker/Owner, Judie Parks and Broker/Owner, Dave Parks from Berkshire Hathaway HomeServices Parks & Weisberg, REALTORS®
Judie, the National News is talking about market shift, what does that look like in Louisville?
[Judie] We have had a shift; it’s not going to be as dramatic as the national shift yet. The main thing to keep in mind is this: it is still a great time to sell your house because we have low inventory. If you don’t price your house really well to begin with, you could be on the market a little bit longer than you anticipate. The other thing is interest rates have continued to go up and will continue to go up. Everyone should keep it in perspective. For us, it is still a very affordable market. The interest rates haven’t affected that much as far as being able to buy, it might affect how much you can buy. The one thing that is probably has been a big change now is that there are some sellers that are being asked to pay closing costs and prepaids for a buyer just because they are trying to get their rate down.
Dave, we know there’s all different price ranges when it comes to homes. Does price point make a difference as far as this market change or is it pretty uniform?
[Dave] It’s definitely not uniform. Different parts of the city are affected differently. You’re first thing to realize is other than inventory, the greatest impact on the cost of buying a house today is really interest rates. It kind of follows that the tighter your constraints are money-wise, the more impact that has. So, in your higher price points, the interest rates are not having quite as dramatic effect as they are in your much lower price points. The lower the price of the house, the more impact the interest rate raise has, because that person typically has less discretionary income to work with if they are borrowing.
Dave, you and Judie both mentioned short inventories, does that effect the market shift as well? Does that lessen it? Heighten it?
[Dave] There is no question that an inventory shortage affects what I call the velocity of the market. Everybody is trying to move faster. I think Judie would agree that overall, the velocity of the market has slowed down just enough that you have some time to think. But still in some of your most in-demand, hottest price points, shortest inventory spots, it is very rapid. For example, you might find a house in Germantown that is priced appropriately and move-in ready, you could put it on the market, and it may have multiple offers in 24-hours. In turn, a property on 20-acres in Taylorsville that is priced appropriately and there’s not a lot of competition, it might still take weeks, or even months, to find the right buyer for that because it is a smaller pool.
Judie, Berkshire Hathaway HomeServices Parks & Weisberg, REALTORS® is very respected in the business, how can you all help a seller right now? What advantages do they have by coming to your company?
[Judie] The main advantage is that we really pay attention to the market and the way that it is shifting very early on. We have been talking to our agents for a month to six weeks now on how to get out there and talk to their sellers who are about to list and make sure they understand the changes that have happened. One of the biggest things that is going to be tough for a seller right now, is that they must price the house correctly from the beginning. It is more important than ever because if they don’t, the market has slowed just enough that you’re not getting your multiple offers and your almost double-stigmatized because you’re on the market too long because you didn’t sell in two or three days and they are having to take that price reduction which in this market, is not a very good sign. We have been listening, we talk to other agents and make sure it’s not just what we are experiencing in our company, it’s across the board. Even the houses that are priced correctly, they are surprised they are not getting as many showings and as many offers as they would expect. They are still selling very quickly, they are still getting multiple offers, but before where they would have 10 or 15, they might have only had four or five. We just want to prepare the seller for that.
Dave, is there a group of buyers that should consider waiting to buy?
[Dave] I think that for most people that we talk to, it is still a great time to buy. The one exception to that is, if you don’t really have a reason behind why you’re trying to move, and/or you’re moving out of fear, that is not a good idea. I am not a believer in making a move because of fear. On the other hand, for example, if you believe interest rates are going to go up, and you believe it is the right time to move, go ahead and make your decision. But if your move is based on fear, relax a little bit, get with a really good agent, let them talk you through your stuff and help you.