How do you guide your sellers through this uncertain market? There are multiple markets being played out right now, and the answer to this question will depend on which market your clients are in or what their situation is. Today I’m sharing five variables that you should pay attention to so that you can advise your clients intelligently and with their best interests at heart:
1. Inflation and its impact on mortgage rates. Remember that inflation does not directly affect mortgage rates. Instead, inflation affects the economy, and when the Fed thinks they have to react to control it, uncertainty may arise. This uncertainty can cause mortgage rates to worsen, as just happened in the last couple of weeks when the Fed raised short-term rates, causing mortgage rates to go up over half a point.
2. The impact of the recession on your clients. Although we talk about recessions’ impact on real estate markets generally, it’s essential to be aware of your clients’ specific circumstances because that will affect their housing decisions.
3. The market segment you’re dealing with. The real estate market is entirely different in the luxury market versus the entry-level median price market. There are different outcomes happening inside each market segment, so be aware of what’s going on.
“Each of these variables will shape the recommendations you make for your clients in 2023.”
2. Your client’s current housing situation. If they’re renting, buying a property at a 5% or low 6% interest rate may not be as shocking to them as compared to selling a property they currently own with a 3% to 4% interest rate.
3. The motivation or circumstances your client is facing. For example, if they have no choice or are highly motivated to move, it doesn’t matter that there’s a recession or high mortgage rates. This plays into how you advise them and when they should make their decisions to get their property on the market.
Each of these variables will shape the recommendations you make for your clients in 2023. If you need any help with how to advise your clients or anything else that’s related, feel free to call or email us anytime. We’re always happy to help.
