2022 has proven to be an interesting year in real estate thus far. If you are like many, watching the market, the houses around you, or even the houses you’d love to live in, your likely seeing times on the market slowly increase… plus your seeing the news of the So to see interest rates climb, may not be a surprise to many.

Now, throughout history, we saw the lowest rates ever in 2020 & 2021, so to see interest rates climbing shouldn’t be a surprise to many folks out there. The part that we all were not quite anticipating (although it was talked about for brief moments months ago), was rates to climb over 7% in 2022. The 2022 market is unpredictable and it’s a go with the flow type of market.

While rates are higher than they have been in recent memory, according to MortgageReports.com, the average since 1971 is 7.76%. We saw rates hit 7% in September and will see where the end up at the end of the year, but here’s the thing… no matter the market, people still will always buy & sell homes. Whether they have to move for a job, or outgrow a house, or are finally fed up and want a smaller home, or to be closer to family or to move where they have always wanted to, people will always be in the market for homes.

The difference between today and two years ago is not only YOU, as the buyer of the properties, but also your REALTOR, understanding the numbers.

What do I mean by understanding the numbers? Well… it’s a combination of a few factors.

For Buyers

The easy and obvious one is understanding the numbers for the homes you are interested in as a buyer.

• What type of home are you looking for? What is the condition of the home?

• How much have comparable homes in the are sold for?

• What is the average list price to sales price and average time on the market?

• Are there any other offers and if so, can you gather as much information as possible on them? (Remember when I mentioned the market is unpredictable, some homes are still getting multiple offers, others are sitting ducks?)

The less obvious one (or maybe not) is understanding the numbers for how much a mortgage (plus taxes and insurance) are going to cost you at the higher rate. If you have been casually browsing for a while, you may need to adjust your numbers downward for the cost of the home to get a more accurate understanding of what you can afford and how much you’ll pay. We like to explain to our buyers that we would hate to show you a home that is over your budget that you fall in love with, as then we have a hard expectation to meet when you start looking at homes within your budget. To help with this, we have great lenders that we work closely with in our group that we can also help to guide you towards so that you can gain a better understanding as well. With all of this information combined together we can better help buyers to achieve their goals.

The thing is, now is an amazing time to be a buyer for a variety of reasons. First and foremost, you have the ability (on most homes) to view it, to breathe for a moment, and the maybe even view it again before rushing to make a decision on an offer. This helps with not only taking off the sunshine and roses goggles that we all tend to have the first time we see a home, but also to ensure that you are comfortable with the decision to make an offer on it. Not to mention, we have the ability to see many more homes on the market today verses the past two years. Inventory is slowly climbing to where you have the ability to actually go tour homes on any given day and see 2+ properties that meet your criteria.

This all coupled with the fact that we also have the ability to negotiate pricing (on some homes), do traditional home inspections (not as-is), ask for closing costs, home warranties, surveys, etc. all over again. Plus you may even be able to get a contingent offer accepted too! These are all things that put the decision making process back in your control, vs the past few years where decisions had to be made at the drop of the dime. This creates an excellent time to purchase, even with higher interest rates.

For Sellers

Now, you may have just read all of the information above and thought to yourself, well if buyers can do all of those things why in the world would I sell my home today? Well, let me give you some information…. in the entire MLS, we have a 1.935 months supply of inventory currently on the market. In Lake County it is 1.979 months supply and in Porter County it is 1.54 months supply through October 5, 2022. This is still considered a sellers market by all traditional definitions due to the lack of inventory. Of the 1935 homes on the market today in the GNIAR MLS, 19% of these homes are new construction homes.

Couple this with the fact that home prices are up from January 1st to October 1st of 2021 vs the same time frame in 2022 at a rate of 10.79% in the GNIAR MLS, it means that sellers are still selling their homes for higher prices than they would a year ago. So yes, you may be negotiating on price, closing costs or home inspections, but you still have the ability to accomplish your goals while likely making more money than you would have a year ago.

Now add in if you are a contingent seller (meaning that you need to find a home of your choice in order to sell), or your a contingent buyer that needs to find a home but it’s contingent on the sale of your current home, you are in many cases able to submit offers today that won’t just simply get set off to the side. These types of offers are now being considered depending on the house and situation for the sellers. So that then puts you in the boat of the buyers as you read above.

To End

There is no perfect timing except for when you personally decide to make the decision for yourself, your family, etc. to move, stop renting, upsize, downsize, or buy the lake house, etc. Understanding the numbers for your specific situation is critical to success in the 4th quarter of 2022. Find an agent that not only knows the numbers but can explain why they are such an important factor in you making the decision to buy or sell. Plus, always remember, there is not stupid question in real estate, so if you have a question, just feel free to reach out! We are here to help!

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