Are you feeling lucky? Join us in raising a pint for St. Patrick — and don’t forget to wear your green today! And if you’re looking for the best spots for a plate of corned beef with cabbage and a nice, dark pint of Guinness, TheSixFifty has you covered, as usual.
The housing market moves in a series of chain reactions. With inflation on the rise in 2022, the Fed began hiking interest rates. This cooled off many potential buyers, which in turn forced sellers to lower their asking prices, leading to a rare drop in median values and eventually a decline in inventory. Despite a brief holiday dip, interest rates remain at long-time highs, and the curve is bending upward.
Last week, we explored the ins and outs of title contingency. Now, let’s talk about loan contingency and what it means for buyers — and sellers.
Loan contingency is a clause that allows a buyer to cancel their home purchase contract without penalty and receive a refund of their earnest money deposit in the event they're unable to secure a mortgage. Like any contingency, this clause could make an offer less desirable to a seller entertaining multiple offers. But it may be necessary to avoid serious financial risk up to and including legal action or being forced to buy the property.
Sounds like a catchy clause, and it may not be all that necessary. Our job as realtors is to provide you with a choice of high-quality lenders who will do their homework and ensure that your loan will be approved before it’s sent to underwriters. At the end of the day, it benefits the lender to ensure that you’re in a strong, lendable financial position headed into the offer process. We’ll explore this more under appraisal contingency in a future post.
We don’t mean to brag, but we’re excited to share that in the midst of a rough year for the real estate industry, RealTrends has named Compass the top brokerage in the United States by sales volume for the second year in a row!
Following a slow second half of 2022, buyer demand appears to be rebounding so far in 2023, with open houses, offers, overbidding, and absorption rates all on the rise. Median prices have yet to recover from recent declines, but those drops are based on numbers from the peak of a 10-year market cycle. And it’s only a matter of time before increased demand and a continued inventory shortage drive up prices again.
The proverbial pink elephant in the room is unpredictable interest rates, which have put a chill on the housing market. Spring is typically the most active period of the year for sales, so we should learn more in the next few months about where we’re headed.
