For anyone that has investigated, been apart of, or just watched from afar.. the post covid market is mostly at a close here in Northern Michigan. We’ve all heard the stories: twenty offers on the first day, each one well over the already inflated asking price, hardly a chance to look at the house, no inspections. During that market, which lasted from Spring of 2020 (as soon as the lockdown lightened up) until roughly the Spring or early Summer of 2022, buying and selling homes completely changed.
Why? Historically low rates, driven by panic from the banks and government, combined with an unfathomably large demand meant that folks monthly budget went much further than normal. If you owned a home, it was suddenly worth so much more than you’d bought it for that it made a lot of sense to sell the house for top dollar, ditch the ‘higher’ mortgage rate and get into a new home with a crazy low rate and tons of money to put down.
Did today’s buyer or seller miss out on something big? Hindsight is always 20/20 so there isn’t a point in dwelling on it. BUT, if someone bought a house in 2016-2019, those folks suddenly had equity beyond their wildest dreams.
Today’s deal is not yesterday’s deal
from a famous salesperson probably
So, what’s happening right now? Clients are able to go look at homes, they’re able to have inspections, the sellers are having to work with the buyers to fix things. “Normal” is not a word that ever ties into any kind of business, but for all intent and purpose, the world of Real Estate in Northern Michigan is normal.
Now, we can’t ignore the clients stuck in yesteryear. Anytime you look on youtube or read some news articles, you’ll see big headlines about “PRICE CUTS AT RECORD HIGH”. That is simply due to the fact that Joe and Joan Seller saw their neighbor sell their house for $600k last year and now it’s their turn to make $600k as well… right?
Don’t get me wrong, there are houses, in the market today, that still go quickly. There are still some battles to get the winning contracts. At the end of the day, a desirable house is still a desirable house. In the market last year, folks were doing the bare minimum and getting top dollar. The bar was incredibly low for both the quality and requirements.
72% of recent homebuyers have regrets about their purchases.
https://anytimeestimate.com/research/american-home-buyers-2022/
Did you think I was going to ignore interest rates? Come on! It’s the elephant in the room – It’s a pretty serious thing to look at. A lot has gone unchecked in the market for too long. If you want to put a real spin on it, think about high interest rates (and inflation) as our “punishment”. Punishment for what? I’m not sure, but looking back, every sector of every business in Northern Michigan skyrocketed the past two years. Ask any business owner friend what their best year ever in business was.
So why would I tell you everything will be OK? Home prices are coming back down to earth, the market is bearing more homes, and the standards for everyone involved in a purchase are increasing. We’ll never have 2% mortgages again, but when they drop in the future, refinancing the loan is completely doable.
At the end of the day, talk to a good mortgage officer at a bank, have a good Realtor, and find a nice home that fits the budget. To finish, I’ll give you this golden nugget that I give to all my clients: Once you’ve bought a home, you can stop thinking about this stuff and live with your life!
Eric Senff Realtor 