What to do if you're looking to buy or sell a house, according to a realtor
AYESHA RASCOE, HOST:
One of the areas in the economy that people are keeping a very close eye on at the moment is the housing market. Interest rates are climbing sky-high. They've risen past 7% for the first time since 2002. And it can be difficult for those wanting to buy or sell a home to figure out where to start. Is now the time to put down an offer? Should homeowners wait for the storm to pass before listing? To make sense of it all, we're joined by Natalie Vaughan, a realtor in the Virginia and Washington, D.C., housing market. Welcome to the show.
NATALIE VAUGHAN: Good morning, Ayesha. Thanks for having me.
RASCOE: Give us a sense of what the housing market is like now.
VAUGHAN: Now, buyers have a little bit more leverage, a little more breathing room. They're enjoying a slower pace, not as much competition, but they are feeling the big squeeze - that's what I'm calling it - high prices, high interest rates.
RASCOE: So, I mean, what kinds of conversations are you having with your clients these days, like for those trying to buy and those trying to sell? And, you know, sometimes people are doing both because they've got to sell the house and to get to the next one. What's on their minds?
VAUGHAN: Well, first and foremost, if you have to buy a house right now, you should go ahead with those plans. We are still not seeing prices come down drastically, and we don't know what's going to happen with interest rates. If they continue to go up, that affordability factor for buyers is just going to be chipped away at.
RASCOE: And what about sellers?
VAUGHAN: Homes are staying on the market a little longer. We're not seeing as much competition for them. Back in the early part of the year, the springtime market, we were seeing homes sell for 2% over list price on average. And now we're seeing homes sell for a little bit under 1% of list price on average. So that indicates there's not as much competition. So sellers really need to be prepared to wow those buyers when they walk in the door - a home that is beautifully prepared for sale, whether it's staged, repainted, refreshed in some way for market. And also they need to be mindful of their prices. Pricing a home based on the springtime market numbers that we were seeing is not the way to go. You want to be conservative with your pricing.
RASCOE: You know, interest rates haven't been this high since 2002. We had gotten used to an environment where interest rates were very low. So now we have to get used to another type of environment.
VAUGHAN: I think that that is the case. You know, when you think about where we were 20 years ago, when interest rates were at the 7% mark, the prices were appreciating very quickly. It was the big, bad, scary housing bubble. The interest rates were not what was deterring people back then if you really think about it. I bought a home back then. I bought a home in 2003. Interest rates were not the big, bad boogeyman, but right now they are. And I think it's really because in just 10 months our interest rates have doubled.
RASCOE: Do you think that this is the environment and what it's going to be for the foreseeable future?
VAUGHAN: Well, look, we're never going to see 3.5% interest rates, you know, any time in the foreseeable future. I have five or six lenders that I speak to on a regular basis. And some of them are saying we're going to hit 10%. That's a scary thought, right?
RASCOE: Yeah, yeah.
VAUGHAN: And some of them are saying, no, no, no, we think that things are going to settle down, and we're going to see maybe a 6%, which - we're over seven right now. And I think interest rates will probably go up maybe to 8%. Six percent is going to seem like a dream in six months.
RASCOE: Nathalie Vaughan is a realtor with Compass Real Estate in Virginia and D.C. Thank you so much for joining us.
VAUGHAN: Thanks for having me, Ayesha. Transcript provided by NPR, Copyright NPR.