Editor’s note: Every Friday, WRAL TechWire takes a deep dive into the Triangle’s real estate markets. This week, we’ll take a look at how home sellers can prepare to list their home for sale without facing the prospect of dropping their asking price. A tip: prepare the home for sale before it’s listed to attract a large number of potential buyers, including first-time home buyers.
Raleigh – Everyone knows that when mortgage rates go up, real estate deals slow down. And when homes become more expensive to buy, there are fewer potential buyers interested in bidding on homes for sale.
That leads to a price plateau. Or at least this is basic economic theory.
Yet a parcel of real estate has unique characteristics, namely, its location.
This means that real estate markets do not always perform uniformly across the country, across the state, or across town.
And not all homes are the same. In the triangle, there are four elements that have shifted the market from rapid home price appreciation to where price appreciation has returned to seasonal, cyclical patterns.
These four factors are changing the real estate market in the Triangle
what is happening
So even as buyers and sellers move away from the real estate markets, especially during the winter months, home sales values appear to plateau, a recent analysis by national real estate brokerage firm Zillow found.
That means sellers who are ready to sell their homes are facing a cold winter market, Skylar Olsen, chief economist at Zillow, said in a statement Thursday.
“Home prices remained in suspended animation in October as more buyers, but especially sellers, took a wait-and-see approach to market conditions,” Olsen said. “Lower home sales are a hallmark of a housing market lull, but now potential sellers are sensitive to losing their historically low mortgage rates, if not more, so there’s reason to wait for a firmer spring season and hope for a mortgage rate recovery.”
Still, there has been some recent relief in the mortgage market, as the latest data from Freddie Mac showed that rates have dropped by half a percent on average, and are now typically 6.6% for a 30-year fixed-rate mortgage.
“With some renewed competition, buyers expecting aggressive price drops may be disappointed in all frothy pandemic-era markets,” Olsen said.
Now that homes are selling for less than list price, the median home price will fall again in October
So what can marketers do?
The Triangle real estate market still favors sellers, Courtney Brown, a licensed real estate agent with Hunter Rowe in Durham, told WRAL Techwire in October.
“It’s not a buyer’s market, but sellers have to work,” Brown said. “Sellers shouldn’t expect they’ll get everything.”
Brown explained that this is not the same real estate market experienced in 2021 or the spring and summer of 2022.
So the first thing sellers need to do is moderate their expectations of how a real estate deal might come together.
Now, for example, buyers are more likely to make an offer and contract to buy a home at or below list price, especially if the home needs repairs, cosmetic updates, or landscaping.
Sellers can expect buyers to move more slowly, meaning that a home may not sell on the first day it’s offered on the market or within the first two weeks.
The number of first-time home buyers is at a record low – but prices are falling in Wake
Do what you can control
Instead of wondering what a buyer might do, sellers can consider what they can control about listing and presenting their home for sale, said Tony Fink, a licensed real estate agent with Linda Craft Team Realtors in Raleigh.
“If you have the ability and means to prepare your home for a broader buyer pool, you should,” Fink said. “The percentage of homeowners who want to take on a renovation project, have the money to do the renovation project and, most importantly, the time and interest to do the renovation project, the more turnkey you can make the property, the better it will perform on the open market.
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Expand the buyer pool
And, Fink added, consider who might be most interested in your home right now: millennial buyers, whether buying their first home or looking to upgrade to a home with a larger square footage or more bedrooms.
“The buyer pool and the largest buyer pool will be the millennial buyer pool,” Fink suggested. “When you’re selling your home, you need to look at it and broaden your appeal to millennial buyers.”
Preparing your home includes considering making some cosmetic updates, Fink noted, such as repainting the home with more modern, popular colors, replacing old light fixtures for more energy efficiency, sleeker ones, and focusing on the home’s curb appeal.
Some home sellers may consider offering incentives to potential buyers who are concerned about affordability at today’s mortgage interest rates, such as helping buyers pay an additional fee to access a mortgage lender’s rate purchase program. The house is more affordable to buy at the seller’s asking price.
WRAL TechWire reporter Jason Parker, author of the report and a licensed real estate agent in North Carolina, works with journalists from WRAL.com to track and present market data and report on how people are experiencing the region’s changing real estate markets. These special reports use the category tag “Triangle Real Estate” or “Triangle Real Estate Market”.