Dave Kupernik 24K Real Estate Market Update

A day hasn’t gone by in the last month without someone asking me “how is the market?”. We can all feel, and especially see, things have changed. Yard signs are staying in front of homes for longer periods of time and the expectation of multiple offers is no longer the norm. Statistically, year to date sales volume is down 20%, following a trend that began in July 2022 when rates started significantly impacting the market. We all know interest rates are the driving factor. To put some context to how much they impact the market: for every 1% increase in mortgage rates, it changes affordability by 10%. If you consider rates have increased 3% to 3.5% since last spring, that’s a 30% to 35% drag on affordability. Yet home prices for detached single family homes actually increased 4.2% year over year. 4.2% is obviously much below the peak appreciation of 17% in 2022. So, what are sellers and buyers to do? One solution that seems to help both is using rate buydowns to reduce the monthly payment. I recently had a mortgage broker run a comparison for me as to the impact of a price reduction versus that same amount of money being applied to a rate buydown. You’ll see from the attached chart how the rate buydown is significantly more beneficial to a buyer. I believe this type of offering will be the top contributor to keeping some stability in the housing market over the next year or more. It allows a buyer to gain serious relief in the monthly payment, while limiting the concessions a seller must make to sell their home, if one is necessary. There is segmentation in our market right now. Understandably, homes in the lower price point are impacted more by rising rates as buyers for those are typically borrowing a higher percentage of the purchase price and are more payment sensitive. Higher end homes have thus far been less impacted and are faring better than most anticipated.

We’ve been able to pivot our marketing & negotiating strategies to match the current market, thus helping us continue to get our clients great results. For buyers, our great relationships with builders have been helpful as new home builders are offering incredible rate buydown options alongside price reductions. Just in the last two weeks, the level of discounts and special rate programs has increased significantly.

Let me close with a fun gift for you. Click this link and you’ll have access to my monthly digital magazine that has fun recreation ideas, great recipes and a few more interesting topics for your reading pleasure.

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Just text or email me if you are not already receiving this monthly and I’ll be happy to add you to our subscription list.

Thanks as always for the repeat business and referrals! Be sure to share this link with anyone you know looking to buy or sell. It’s a digital business cards where they can download my contact information directly into their phone or desktop. In fact, if you haven’t updated my information since I moved to the new suite in my office building, feel free to use this link to do so.  Thanks!

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Currently though, it is hard for a consumer to easily search for homes using “rate buydown” as a search criteria. Fortunately, I can do so for my clients via our MLS and make sure those houses make it to my buyer’s search results. I also know how to promote it for my selling clients, so agents and consumers alike can more easily locate their home in searches.