Oh Shift! Did you feel that?
The real estate market in Baton Rouge shifted in what felt like overnight mid-June 2022. Where does that leave local homebuyers and sellers? We are here to help you break it down.
Mid-June of 2022, the Feds raised the interest rate by .75%, and we all had a freak-out moment collectively. What in the world will happen to the real estate market? First things first… the Federal Reserve does NOT set mortgage rates. However, key players in the mortgage industry keep a close eye on the Fed. There will likely be more mortgage rate hikes, but they will not be all at once and will likely not be a full three-quarter of a point. We anticipate mortgage rates to top out at 7% or maybe a little over by the end of 2022. The biggest jumps in mortgage rates have already happened, and we believe things will start leveling out.
What does this mean for buyers?
If you are a buyer in the baton rouge real estate market, things are about to get a little easier for you. We know that is the opposite of what you are feeling right now. With rising interest rates, many buyers have been priced out of the market or have had to tweak their price points. It’s hard to understand when all of your friends just bought homes at 2.5-3%. The good news is that inventory is starting to rise so you will have more opportunities. The chances of multiple offers and the need to go over appraised values have decreased considerably.
Marry the house date the rate
If you are in the market and the home you have searched for becomes available, go ahead. Buy the house! Don’t wait for the rates to come down. When rates stabilize and start their downward trend, you will have an opportunity to refinance. That may take a couple of years but think of the equity you built during that time.
What does this mean for Sellers?
If you are a seller already on the market, you may be facing necessary price reductions. With this baton rouge real estate market shift, you now have competition that wasn’t here just a month ago. Don’t freak out. We are not headed for a crash. The market is correcting itself, and you will still make a profit if you have been in your home for three or more years.
Is your house in tip-top shape? With the increasing inventory, buyers are not settling for the first thing they see. Sellers need to have their homes beauty pageant ready to stand out in the market. We are also starting to see sellers offer buyer closing cost assistance. It’s been a minute since buyers have been able to negotiate that.
Where does this leave us?
People will continue to need housing, and real estate is still the very best investment you can make with your money. We are getting back to a more balanced market like we were in 2019. Let’s face it. We could not sustain at the rate we were going. Take a breath, regroup, rethink your goals and let’s do this!
Take a peek at our video where we go a little more in-depth regarding the Baton Rouge Real Estate Market shift of 2022: