The 2023 market is presenting some challenges and uncertainty. With economic experts shrugging their shoulders and the Fed racing to regain control, consumers are left wondering what the future looks like.

The real estate market is a bit of a question mark as well. Check out my previous post: Can You Time The Real Estate Market?

Not every community is experiencing the same conditions, but in the high demand neighborhoods that I serve in PA and NJ, it feels a bit like a traffic jam of Buyers!

Some of the Buyers who have been sitting in traffic are running out of gas and are stuck. Other frustrated Buyers with their full tanks are making bold and risky moves to force their way to the front.

The backlog of qualified buyers from years of depleted housing inventory creates multiple offer situations on desirable properties.

Buyers are also faced with the mortgage rate correction. After recent years of historically low rates, the normalization of mortgage interest rates has dramatically impacted affordability in a short timeframe. Buyers that were searching at one price point last year are no longer able to afford the monthly payments.

The textbook expectation is that raising rates and putting pressure on affordability will naturally force prices to drop. However, not all communities are seeing the inflation of home values leveling out yet. As long as the demand remains high and the inventory remains low, the pressure on prices will hold.

Buyers are faced with squeezed pockets on top of slim pickings!

Competition is exhausting. Many first time home buyers are feeling defeated. The bidding wars are favoring investors and cash buyers. This environment leaves so many hard working, qualified people at the bottom of an uphill battle.

So now you are are thinking, “Thanks Emily! What wonderful and inspiring news!”

Stick with me for a minute!

Many homebuyers have a preconceived idea of how the home buying process should work. They have expectations set from either a previous experience, stories of family and friend’s experiences, or the romantic vision they absorbed from TV home buying shows.

What we all have to remember is that the real estate market is constantly fluctuating. These ebbs and flows are impacted by a variety of factors: inventory, interest rates, economic health, national tensions, international tensions, politics, etc.

Think of an old fashioned scale that is constantly teetering back and forth as objects are added or removed.

As the market shifts back and forth, you need to be flexible and be prepared to adjust your strategy for Buying or Selling real estate.

With that said…

here are 3 tips for qualified home buyers who are struggling in this market!

1. ADJUST YOUR BUDGET - Let’s assume you have a pre-approval letter for $400,000. If you know that this market in your desired community is creating bidding wars, you shouldn’t be looking at any homes listed over $350,000! You need room to compete! Reduce the price point of homes you are looking at to be AT LEAST $50,000 below your budget.

2. ADJUST YOUR LOCATION - Your dream location may be one of the highly competitive areas. Discuss this with your agent and consider exploring some nearby neighborhoods that may have a lower demand.

3. ADJUST YOUR WISH LIST - Take a look at your must have list. What features are you able to sacrifice for the next 5 years? Maybe you don’t NEED that pool. Maybe you don’t NEED that fourth bedroom. Maybe you don’t NEED that finished basement. Take some time to think critically about your true needs. Be open to letting some items on that list go for this purchase. Remember this purchase does not have to be your forever home!

Note the key word here is ADJUST! There are deals out there and I have had First Time Homebuyers closing on homes! IT IS POSSIBLE if you are willing to shift your mindset. The home you purchase this year may not be your dream home, but remember Home Ownership is still one of the best ways to build wealth! Put your business hat on, do your best to dial back the emotions a tad, and focus on finding a great starter home. This is just a stepping stone in your home ownership journey!

I’d love to dig in a bit deeper on this topic with you. Please reach out and we can discuss your personal situation and come up with a strategy that you are comfortable with!

EMAIL ME: emily.woods@compass.com