Where There's a Will (and a Ron), There's A Way

Dated: January 14 2024

Views: 198

Hello, from the sixth-hottest real estate market in America (according to Zillow), where we're coming off a December that saw a steep (11.4%) drop in home sales comparable to December of 2022. 

Some are alarmed by that, but we have to remember that 2022 was a ridiculously hot year for home sales here, and even with the drop, Atlanta was one of the hotter places in the country for sales. 

WIth signs that inflation was cooling, the prevailing mindset was "interest rate drops are comng in 2024" which had everyone from potential buyers to agents, mortgage lenders and potential sellers breathing a sigh of relief. Then came December consumer price index (CPI) data earlier this week - showing an uptick that has experts thinking maybe those rate reduction(s) won't start until June vs. March.

If you're a potential buyer or seller, what's this mean for you?

Unlocking the "lock-in effect"

For people considering or needing/wanting to sell, it means you're in this awkward spot where your current mortgage rate is likely 1-to-3 percentage points lower than any new mortgage you'd take on if you sold then bought elsewhere. I call this "rate jail;" it's hard to get out. I've seen it called the "lock-in effect" too. Either way, the hesitation is understandable - even though there are ways to buy down your rate immediately and/or to refinance when they come down. 

Those should be considerations if you have to buy now, whether you're looking to sell and buy or just make your first-time home purchase. A rate buy-down will either require more cash from the buyer or a concession from the seller - which is possible for a home that's been listed awhile on the market with a seller eager to move on. It's also cheaper than reducing the price to try and entice more interest, so this is where having savvy negotiators representing the buyer and seller come together to make a deal work.

The art of compromising (with yourself)

Another option for buyers is to look below your budget a bit (hard when affordable homes are in such short supply, but here me out ...) that either aren't fully move-in ready or just only make you 65% happy. The thinking here is, you're either going to live in it awhile and have time to make up the remaining 35% on your "happiness" index - especially if you bought under budget and left yourself some money to work with, or you may be buying into some instant (or near-instant) equity, which gives you access to a home equity line of credit (HELOC) - a loan - to make those upgrades you didn't immediately get when you bought the home. You can do that within 30-45 days from purchase.

Where there's a will (and a Ron 🤓), there's a way.

                               

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Ron Roberts

Hi! I’m Ron, a Georgia-born Atlanta resident and real estate agent ready to put my education, personal and professional experience and work ethic into helping you find your new home, sell your e....

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