Is The Pompano Beach Real Estate Market Cooling Down?
People who want to buy or sell a home face a different housing market scenario. The previously hot markets are starting to cool off, and sales are dramatically plummeting. What do experts say about it? This article will help you to understand about Pompano Beach real estate market cooling down.
According to some real estate experts in Florida, signs are showing that the housing market is cooling off. Ken Johnson of Florida Atlantic University spoke about the housing market situation in July 2022, saying that there are fewer properties sold during a given marketing time and the number of bidding wars also goes down. Many real estate agents also agree with his statement. Anthony Salerno of Prime Home Reality said that during the past months you could do an open house with more or fewer parties walking through, and now there are only 5 to 7 parties.
Whether the housing market is truly cooling off or not, there is no doubt that the housing market now is not the same as it was two years ago. We always want to expect only positive things, but here are some signs that the housing market scene in Pompano Beach might be slowing down:
Inventory is Increasing – Pompano Beach Real Estate Market
In the course of the pandemic, one of the things that caused the rise in housing prices is because of a significant inventory shortage. The explosion of remote work triggered the demand of home buyers, and there were not enough houses for people who were interested in purchasing.
According to the National Association of Realtors, there were more than a million unsold houses in the U.S. market at the end of May. It is a 13% leap from the earlier month, and there are 19% more active listings in the month of June, according to realtor.com.
The housing sales in South Florida such as in Broward County seem to slow down due to the increase in mortgage rates, and the housing prices are still not dropping. Inflation also affects the rise in mortgage rates and costs. Because of this, most Americans are not buying houses when compared to last year’s record.
Between the months of April and May, the existing houses’ sales dropped by about 3.4%, while 6% for newly constructed homes, according to the National Association of Realtors (NAR). The chief executive of NAR also said that sales would drop further in the months ahead.
Fewer Mortgage Applications
Inflation deeply affects everything, and mortgage rates are not an exemption. The mortgage rates increased from 3 to almost 6% in the past six months. This has led many home buyers to step back from the real estate market.
According to the Mortgage Bankers Association, the mortgage applications at the end of July had dropped down to 17% compared to the same week last year.
Buyers are Withdrawing Deals
According to the data released from Redfin, around 60,000 home deals fell out of the agreement in June. This is about 15% of all houses under a contract that month. This is said to be the highest share of let-downs since the start of the pandemic.
The increase in rates is one of the reasons why people are canceling sales. This is because some buyers cannot afford the added rate imposed on them or may not qualify for a loan.
What Does a Cooling Housing Mean for Sellers in Pompano Beach Real Estate Market?
When sellers hear about the cooling housing market, they tend to panic but that should not be the case. They actually still have the control, and according to the chief executive of Redfin, Daryl Fairweather, it is less risky to sell a house now than wait till next year.
Though the demand for buying houses is going down because of the high prices and rates, there is no need to panic; you just need to raise your game. Here are some things that you can do to get you started:
- Be fine with fewer offers
Fewer demands could get you fewer offers but it should not let you down. The bidding wars in the last few years have been good for sellers but in reality, having many offers does not matter because you just need one good offer.
- Be ready to bend your price
Lowering your price may not be a good idea for you, but shrewd home hunters know if a home is overpriced. They will know if your house has been sitting on the market for a long time. You need to consult with your real estate agent to adjust the price according to the market value of your house now and not the previous season.
- Find cash offers
Some people do not want to borrow money but it does not necessarily mean they do not want to buy a home. In March 2022, 28% of home sales were all-cash sales. The good thing about cash sales is that you do not have to pass the time waiting for buyers to obtain financing.
- Patience is the key
The cooling housing market is no joke for sellers but you have to be patient and just accept the situation. Just trust the whole process of home selling, and maybe you can just use your time working with your real estate agent to organize your house.
What Does a Cooling Housing Mean for Buyers in Pompano Beach Real Estate Market?
Because of the shortage in inventory, prices are still up at a national level. Real estate experts predict this will continue to rise until the end of the year due to the shortage.
This situation may be very tough, especially for first-time buyers. For buyers with a limited budget, you still need to work harder and try to be more competitive to get the house you desire. If you intend to buy a house before the year ends, here are some tips that may help you fully prepare.
Set a budget and stick with it
We know how frustrating it could get when you finally find the house of your dreams only to realize that it is beyond your price range. It might be tempting to buy it, but buying a house you cannot afford will just give you a headache. So be patient and try to save more and raise your budget if the house you really want is a bit expensive. Also, remember to keep your mortgage rate payment around 25% or less of your take-home income.
Pre-approve your mortgage
It is easier if you get a mortgage pre-approval. This will give the lender confidence to work with you. Having a pre-approved mortgage is also good because it can assure the sellers that you can back up your bid with real money. This will also give you more advantage over other buyers.
Get the right mortgage
When it comes to choosing the right mortgage, it is highly recommended to get a 15-year fixed-rate mortgage. This is the fastest and most affordable way to get a house. Do not accept an adjustable-rate mortgage. You will likely pay a much higher rate in the long run. So no matter what your lender is offering you, do not fall for an adjustable-rate mortgage.
Work with an expert
Buying a house is a very stressful process. It does not matter whether you are in a hot or a cooling-off market; this endeavor can really take its toll on you. To avoid a stressful process, you should work with a real estate expert in Pompano Beach. Having a good real estate agent by your side will help you find the right home regardless of the market situation.