Navigating the Cyclical Real Estate Market: Opportunities and Expectations for Buyers and Sellers

As we know, the real estate market is inherently cyclical, and we are currently experiencing a notable shift. Despite these changes, it remains a seller’s market due to a persistent lack of inventory. However, signs of a transition are evident with properties spending more days on the market and a decrease in multiple bids and as-is purchases.

Late summer typically experiences a slower pace in real estate transactions. Nevertheless, sellers can still anticipate excellent returns on investment (ROI). For buyers, the market is becoming more favorable. Interest rates (IR) are predicted to decline in the fall, offering potential relief to those who have been grappling with higher rates and fierce competition.

The National Association of Realtors (NAR) and various financial experts project an uptick in sales come fall. According to NAR’s January 2024 report, the average interest rate is expected to drop to 6.3% by the fourth quarter, down from 7.8% in the last quarter of 2023. Supporting this trend, a recent NAR update on July 11, 2024, noted that the 30-year fixed mortgage rate from Freddie Mac declined to 6.89% from 6.95% in the previous week. These reductions are encouraging signs for buyers who have been frustrated by high interest rates, low inventory, and missed opportunities.

As inflation comes under control, the Federal Reserve anticipates a decrease in interest rates this fall. This expected reduction presents an excellent opportunity for buyers. Some lenders are offering innovative rebound programs, allowing homeowners to refinance at no additional cost when rates decrease. The expression “date the rate, marry the house” has never been more relevant. Historically, over the past 40 years, the average interest rate was around 6.7%, and while we may not see the ultra-low 3% rates of recent years, the anticipated reductions still offer significant savings.

Lawrence Yun of NAR highlights that while the exact timing of the first rate cut is uncertain, the longer-term outlook includes the possibility of 6 to 8 rate cuts by the end of next year. This forecast suggests that home prices will remain stable and sales will likely increase, especially in regions with rising inventory.

For sellers, this means there is still a window of opportunity to secure strong returns. The current market dynamics favor those who are well-prepared and responsive to changing conditions. Properly priced and well-presented homes continue to attract serious buyers, even as market conditions evolve.

For buyers, the forthcoming changes signal a time to stay vigilant and be prepared to act as opportunities arise. Lower interest rates in the fall could mean more affordable financing options and less competition, making it a prime time to enter the market.

In conclusion, the real estate market is poised for significant shifts in the coming months. Both buyers and sellers need to stay informed and agile. By understanding the cyclical nature of the market and leveraging current trends and predictions, they can make strategic decisions that align with their financial goals. Whether you’re looking to buy or sell, the key is to stay proactive and ready to capitalize on the evolving opportunities in the real estate landscape.

About the Author

Pat along with her husband, Mike Settar, have been Harrison Township residents for 31 years. Pat and Mike raised their three daughters, Meryl, Carly, and Paige in Mullica Hill. All three Settar girls attended the highly-rated Harrison Township Elementary Schools and graduated from Clearview Middle and High School. Pat and Mike love being residents and raising their family in Mullica Hill.

Pat Settar is a prominent member of the community. She is the Chair of the Harrison Township Beautification Committee, a proud supporter of the Harrison Township Historical Society, an annual sponsor of Harrison Township Day and Lights on Main, and supports a variety of other causes in our town.

Pat has been recognized with several Real Estate industry accolades, including the Top 1/2% in the BHHS Network, a member of Philly Magazine’s Who’s Who for Top Producers, and a Platinum Award from the Board of Realtors, and many others. Her most cherished industry honor is the Don Brogan Peer Appreciation Award. Pat was chosen for this prestigious award by her peers from the Gloucester/Salem Counties Board of Realtors for her high ethical standards, maintaining cooperation with others in the industry, having a spirit for the Real Estate business, and her knowledge of the profession. Pat Settar has built an all-female team and is proud to mentor and support these incredible women in their Real Estate careers. The Pat Settar Team has a 5-star rating on Zillow, she says that making her clients happy, makes her happy!