There’s a fair bit of movement happening in the property market in Kent, and unfortunately, accelerating interest rates are likely responsible for it. When people have to fork out considerably more to borrow, they get a lot less excited to buy – meaning that Kent homeowners are having to deal with an array of potential buyers who are significantly less likely to close.
The obvious side effect of housing that is less appealing due to a more expensive financing environment is the decreased probability of receiving a bid that meets or exceeds your expectations. Stagnant home listings derail future financial plans, and in your particular case, this could be troubling news.
What is a good solution for those stuck in the chilled-to-almost-frozen current housing market in Kent? Well, the angle of “We Buy Houses As Is,” is one. An elevated number of homeowners are moving to this approach in a hurry, and at first, it appeared to be a rather odd trend. It makes sense when you consider the overall idea behind this technique. Many homeowners don’t want to bother with the entire selling process because it’s stressful, the current market conditions give us home listing plebs no enjoyed anticipation of success, and the typical timeframe to close is way too lengthy.
Understanding Rising Interest Rates
Rising interest rates can considerably shape the housing market. They have two primary effects: they change mortgage affordability, and they change buyer behavior.
When interest rates go up, it costs more to borrow the same amount of money, so, all else equal, the cost of a home goes up. This is because the cost of a mortgage is not a function of the home price, but rather the interest one pays on the mortgage. A change in mortgage rates can move the mortgage payment sufficiently that it changes the ability for some to buy a home, causing them to wait for prices to fall or to buy a less expensive home than they might desire. It can move the market.
It would be great if that were all to the equation, but now we have to add in another set of factors. What exactly is it that moves interest rates? As it turns out, that can be many things, including inflation and economic conditions. Central banks around the world will tend to increase interest rates when inflation ramps up. There are very good reasons for that, and this dynamic has the potential to be a factor in the equation in the coming months or years. Still, if that is the case, why is it that the Bank of Canada is suggesting that they will not raise rates for another few years and that the U.S Federal Reserve is suggesting much the same?
The second factor, economic growth, can foster an environment characterized by rising interest rates as well. When economies are doing well, demand for loans increases. With increased demand for a finite money supply, interest rates tend to move higher. Determining the level of rates within that two-sided dynamic can be very unpredictable. So, the potential homebuyer must navigate varying mortgage rates and determine for themselves how much they might affect their market dynamics.
Looking at the second primary factor, changing buyer behavior, we need to appreciate not only the first-time homebuyer who can no longer afford to break into the market but also the potential second- or third-time homebuyer who might not have the equity to move up, and they might decide to wait until their circumstances improve. What does that do to the market?
…So the dynamic of rising interest rates can create many interesting moving parts. If you are a buyer in this market, a Realtor in this market, or a prospective seller, you need to understand these dynamics.
The Phenomenon of Fast Home Sales in Kent
The reality of fast home sales in Kent is the culmination of several factors:Demand
Homes are selling in Kent at an average of just 20 days on the market, according to recent stats from the Northwest Multiple Listing Service.
More people—that is, more individuals, more engaged couples, and more families … just more—are moving to our city.
And why not? Suburban living with urban proximity makes Kent a fantastic place to live.Limited housing inventory
When there are fewer homes to buy, people often have to compete to purchase them. So they are more likely to make an offer sooner rather than later.
By my count via NWMLS stats, Kent has seen a short 30% decline in home listings year over year. Those who wait to buy a house may find themselves left out in the proverbial cold. And who wants that?Rising interest rates equals more “buy-now” buyers
When interest rates go up, homebuyers feel it in their wallets. When more of a 30-year home loan has to go toward interest—instead of the principal—there’s going to be a lot less money for a new boat.
The Impact of Rising Interest Rates on Home Sellers
Today, as interest rates rise, they create significant shifts in housing that directly impact sellers in several ways:
Higher Rates = Higher Mortgage Costs = Less Buyers = Lower Demand
- Urgency: Higher rates often mean higher monthly mortgage payments for buyers. This can cause a ‘thinning of the herd,’ whereby the pool of buyers decreases as some are no longer able to afford buying a home. This creates more urgency for sellers to sell before things get worse. If this isn’t a big enough problem already, compound it times 100 due to our next challenge.
- Pricing/Perceived Value: Rates potentially add another level of complexity to the sales process. In a declining market, sellers already have to worry about how to price correctly – not to mention buyers’ increased desire to ensure their property shows/maintains/improves value (or what they perceive as value). This is where most agents often don’t cut the mustard.
In this challenging environment, selling a home ‘as is’ can be a strategic advantage in two ways:
- Appeal: Many buyers desire more of a ‘ready-to-move-in’ type of property. Some/many buyers desire to avoid the potential of dealing with renovation costs, among other cost-related factors. Thus, selling your property ‘as is’ may increase the appeal of your property, potentially causing your property to be more desired.
- Efficiency: By selling ‘as is,’ sellers also better leverage the perceived/appraised value devised by their appraiser. They may strategically avoid unexpected repairs. This can speed up the preparation process, as sellers can more quickly list their property. If done efficiently, sellers may also have a timely advantage of gaining a return on their property. Listing in a timely manner may also avoid the occurrence of future rate hikes!
Why Choose ‘We Buy House As Is’
“We Buy House As Is” is not just a slogan. It’s a lifeline for those looking to sell their homes fast and on their terms.
- You don’t have to make any repairs or improvements to sell your house to us.
- You don’t have to endure a seemingly endless parade of onlookers.
- You don’t have to keep your house tidy and “show-ready” at all times.
- You don’t have to kill an entire afternoon, driving around with your pets, so prospective buyers aren’t made to feel uncomfortable.
- And you don’t have to haggle over your house’s price and get nickel-and-dimed with concession requests.
In short, you don’t have to sell your house the old way. Work with us, and take the shortcut. But don’t just take our word for it…
See what some others had to say:
Tips for Homeowners in a Rising Interest Rate Environment
If you are thinking about selling your home, the very first thing to do is to take a good hard look at the current estimated value of your property. You can get a rough idea using online home value estimators. However, for a more accurate estimate, you can contact a professional appraiser or a real estate agent for a current home market evaluation in your area. Having a good understanding of your home’s current value will start you off in the right direction, including having a good idea of a list price strategy and to help you make some of the selling decisions along the way.
The other big gorilla in the room of the home sale process that you’ll need to have a good handle on is timing.
The timing of selling your property can be very dependent on local conditions. Local conditions can vary due to various factors like seasonal changes, the larger regional economy, and how “hot” the local real estate market currently is. If you’re trying to squeak out as much profit as you can from your home sale, you may need to consider holding off for a while on your home listing. Do your homework. If your local area happens to be like my own, where the majority of the housing is built in the 1960s-1970s, you may be better off waiting to sell in the summertime when housing sales are generally higher due to “end of the school term” buying and sell-off.
You’ll also need to decide if you want to sell as is. Selling as is will likely result in a lower selling price than current neighborhood housing prices, especially if there is a lot of work that will need to be done by the next owner—this “buyer’s project” lowers housing prices in a particular neighborhood. You’ll need to also think about the problem from a buyer’s perspective—would you like to purchase your property as is, or do you think it would be a good home to flip for profit with a few minor changes/upgrades?
Rising interest rates are shaking up the housing market in Kent, making for faster home sales. As buyers scramble to secure properties before their dollars won’t stretch as far next month, sellers seem to be (at last!) on the right side of supply’s teeter-totter. We’d all like to know details about this next little point, but we do see homes moving quickly, often finally above asking price. Call or text us for the source of insider info at (253) 289-3773.
If you are considering selling your Kent home, you’re in the right place at the right time. Yes, it’s horrible to admit, but the world won’t wait for you. Think about rising interest rates in the context of these recent maddeningly fast home sales. There’s so much to do; there’s so little time.
If all the “to do” of selling a home looks daunting, you may want to hear right now about our “We Buy House As Is” service. We meet you, inspect the property, and give you the option to liquidate. You don’t have to fix anything or clean anything; we buy your home in exactly the condition you offer it. We’ll do the negotiating as the professional homebuyers and make you a fair cash offer. If you like our bid, we’ll draw up a contract. If you sign the contract and take it to a title company, you will be paid.
If you wait till next year, you might get a higher price. Will you have to wade through more prospective buyers in the next couple of months? Will your home be good enough for showings for the next few weekends? Will your home make the cut, so it will sell? If your home will make the cut, you will join the “Yes” club of those who didn’t wait until next year, month, or weekend. Now is a very good time to “Just say yes.” Call or text us at (253) 289-3773 or reach us by email.