Those considering buying a home in Norman before the end of the year should be prepared for bidder wars despite recent signs of slowdown in market activity, local experts say.
Last month, property new registrations in Norman fell from 290 to 252. The estimated time it will take to sell the existing inventory is still 1.2 months, data from Multiple Listing Service, a database for the real estate market, shows.
After a $ 10 per square foot price jump for a Norman home to $ 132 in May, the price has remained relatively stable this summer, according to local MLS data.
This slight slowdown comes after more than a year of heating up housing markets across the country and locally. This was due to stimulus payments for COVID-19 aid and Federal Reserve intervention through the purchase of bonds made up of loans from banks. This enabled the banks to act as an intermediary between the homebuyer and the investment industry, according to Marketplace.
This enabled banks to lend more money at lower interest rates, Marketplace reports.
Rob Schaerer, broker and partner at Dillard Group Real Estate, said home appreciation rates are likely to normalize. He said stories of bidding wars that resulted in exceeding the list price intimidated some buyers, causing setbacks until the market became more attractive to them.
In April a house might get 10 to 15 offers, but in the last few weeks maybe four to five, said Schaerer.
“I know a few shoppers came by who just wanted to sit and watch the roller coaster instead of riding it for a while,” he said.
Schaerer said that people with this attitude generally expect the market to return to a state more favorable to buyers. But in and around the Oklahoma City subway area – the 9. Most affordable housing market in the US, and one of 14 cities that have grown by 100,000 people or more in the past decade – he’s not sure if that’s going to happen.
“It could be, but if we increase the population faster than we can build or accommodate houses, only one thing can happen, and that is the increase in prices,” said Schaerer.
Schaerer assumes that the potential buyer focus will deviate from the housing market in the autumn months, presumably due to the return of the children to school and changed timetables. That could mean a prolonged plateau of demand until the end of the year, he said.
Sunshine Realty’s Cody Simmons said he had seen the Norman and Noble market slow down recently, but the overall pace is still high.
“There are still multiple listings on real estate,” said Simmons.
Simmons said the biggest obstacle for customers navigating the current market is usually contingencies or clauses in the sales contract that must be met in order for a home purchase to move forward.
He said emergency problems are common among those who have to sell their property before they can buy another home.
“If you were selling your home and had someone who could buy now as opposed to another potential buyer who had to wait to sell their current property, you would take that one without an emergency,” Simmons said.
A Makler.com The report released this week shows that the 2021 home buying season has aligned with pre-COVID-19 seasonal patterns. The best time to buy a home is the week of October 3rd, according to the report.
While outbidding the competition could mean paying above list price for a home, the low interest rates could still provide buyers with value in their purchase. Fannie Mae, a government sponsored mortgage finance company, and the National Association of Realtors predict interest rates will stay below 3% through January.
Gil Barteau, executive vice president of First Liberty Bank, said lender activity over the past 18 months has been unprecedented.
“We haven’t let up, and in the past three weeks we’ve seen an increase in purchase credit applications,” Barteau said. “We are busier than ever before.”
Barteau said the prices buyers are getting are historically low. He said they are unlikely to rise locally in the coming months, but inflation is the wild card.
The Bureau of Labor Statistics’ August Consumer Price Index report shows the cost of goods and services has increased 5.3% over the past 12 months. The national broker association expects average consumer price growth of 4.5% for 2021.
If inflation is short-lived, Barteau won’t raise rates significantly, but if it’s perceived as more permanent, rates could theoretically rise.
If the federal government decides to stop buying $ 40 billion worth of mortgage-backed securities every month, interest rates will likely rise, he said.
“They are suggesting it could be early 2022, but they have also indicated that it could be late 2022,” said Barteau.