The only certainty about the current housing market around here is its uncertainty. Higher than normal interest rates, lower than normal inventory, and other factors are putting a drain on the people looking to purchase their next home.
With the battle for finding and securing a home increasingly difficult, it makes sense to hire a realtor who has the knowledge and experience to make things happen.
Paula Allin of HomeSmart in Smithfield has seen plenty of upheaval in the last several years to compile a book. She understands the complexities of buying and selling homes in tough markets. Her process involves educating her clients to make informed choices and be prepared.
“I tell people right now, to marry the house and date the rate,” she said. “You can always refinance once you buy the home. Prices are still high due to the low inventory. We have a normal demand, but inventory is still down 44% from pre-pandemic levels, nationwide. It takes a delicate balance to ensure they are paying a fair price for what they are investing.”
Allin said that for a balanced housing market, there needs to be at least six months of availability (closer to 5,000 homes available for sale). There is just over one month of stock that is currently listed. While the number has recently crept up over 1,000 units, Paula said that is too low to even the playing field for possible homebuyers.
It gets even bleaker for people searching for specific types of home. There are now less than 200 multi-family homes on the market, 33 mobile homes, and just 454 homes, priced under $500,000. That translates to first-time homeowners having trouble locating a suitable place to live that fits into their budget.
It helps for you to maintain the home if you are thinking of selling. Not keeping up with the little issues can lead to some major problems, either for the homeowners or the owners-to-be, that will result in the home selling for less, as the new buyer will discount their offer to offset the cost of delayed maintenance.
Some of Allin’s recent dealing involved horror stories of homeowners who were not able to get the help they needed to keep the home in order.
“I had one client who had water leaks from a cold snap. It was raining in her kitchen. When we opened the door to the basement, there was two inches of water on the floor. The house had to be condemned and cleaned out for water and mold. The owner was moved into assisted living because she couldn’t keep up with the house,” she said. The new owner put in a brand-new kitchen and updated the home.
Allin said that the reasons for people not dealing with such things may not necessarily be physical ones, either.
“I had another client living in Providence who didn’t leave her house after Covid-19. She went online and purchased 100 pairs of shoes that were still in their boxes that ended up being donated. She didn’t have anyone to check on her, and she was lonely. Plus, it gave her something to look forward to when the packages arrived.
“We were able to donate the shoes to local charitable organizations,” Allin added.
As for “being prepared,” invest time to speak with a local lender. Allin said that they will better know the region and be better equipped to answer questions quickly. Whereas, a national headquarters may be taking your call from California or someplace else. Plus, being able to reach your lender late at night or on the weekends can be a necessity in this competitive market.
Also, knowing what you can afford and staying on top of your credit score are important points toward securing the home. She said bad credit can be repaired, sometimes, it is simpler than you might think. Being able to pay bills on time also makes sense. Not having any surprises coming up to the closing can make the process flow smoother in most cases.
In either case, knowing what your limits are can either make or break a potential sale.
“The market is constantly changing. Failing to keep up with it can have negative consequences for the buyers. For example, a couple could be pre-approved for a $350,000 loan, and in a few months, may only be able to get $300,000. Because of the uptick in the interest rate. It makes complete sense to keep track of your situation so there are no detours in the process,” Allin explained.
With the interest rates hovering around 8 percent in the late fall, Allin sees an uptick in people selling their homes in the coming year. The market will start to run ahead once the warmer weather begins in a few months. By then, there could be more federal and state programs available for first-time homebuyers, veterans, seniors, and other groups. Also, the interest rates are just starting to decline; today, they are under 7% for the first time in several months. The change in the interest rate could be a motivator for both sellers and buyers alike.
For more details on either buying or selling a home in Rhode Island, Massachusetts, or Connecticut, please contact Paula at 401-241-2976 or firstname.lastname@example.org.