As we wait to see how the real estate market will unfold, we’re here to report the facts and give you guidance. In September, closed sales were up 24.5% over August and 53.5% over July. Closings usually taper off before the holiday season, but many sellers have been making price adjustments, which is bringing buyers back to the table despite higher interest rates. Last month, there were 144 price reductions on 112 properties, meaning that a quarter of the guard-gated homes for sale had a price reduction—and some had more than one.
Over the last several years, the market has been split about 50/50 between cash and loan buyers. Deals for cash buyers are better right now, but buyers getting a loan still have the option of a 5, 7, or even a 10/1 ARM (adjustable-rate mortgage) with regular principal and interest payments amortized over 30 years. These loans typically offer about a 1% lower interest rate, a popular option for those getting a jumbo loan. Many of these borrowers figure they will either move by the time the rate adjusts or refinance if rates drop.
While the price ranges of $1,500,000-$1,999,999 and $3,000,000+ are trending toward a buyer’s market, many price ranges are showing a more stable absorption rate of 6 months or slightly over. This doesn’t mean that all is well. Absorption rate is a rough measure of supply and doesn’t take into account the differences among properties, such as views, renovations, etc.
As a team of experienced experts, we know how to price, market, and ultimately sell guard-gated real estate. Give us a call to get started!