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This summer was busy with listings and showings, but the rate of actual sales was incredibly slow. Like no summer I can remember in my 20-year career. It felt reminiscent of the Great Recession.
This is a level of buyer behavior not seen before. Though mortgage interest rates declined incrementally during the summer, falling under seven percent to a little above six percent, it hasn’t been enough to move the needle. The available inventory of homes in our area is five months. That’s well within what real estate analysts call a neutral market of four to six months of inventory. Last spring, we had only 1.4 months of inventory. That’s a massive jump in available inventory in a relatively short amount of time.
My team currently has active listings in mint condition that have showings almost every day. Last spring, they’d have been under contract within weeks. Last year, it would have been days.
For the few properties that did get offers, getting through to the closing process has been difficult.
Nationwide, there were more failed transactions this summer than we’ve seen since the Great Recession. Our team had nearly $20 million worth of transactions fail to close so far this year because buyers bailed out, forfeiting their earnest money in many cases. Anywhere in the process, buyers would terminate the contract. We had one buyer simply not show up to the settlement on the day of closing with no warning. Even his broker couldn’t find him. This is unprecedented.
Buyers are feeling the weight of high monthly mortgage payments, driven by soaring home prices and elevated interest rates. Many are questioning whether it's worth the commitment, with some willing to walk away from substantial deposits — $20,000, $30,000, even $100,000 — rather than face mortgage payments approaching $20,000 per month over the next 30 years.
However, it’s important to shift the focus from immediate financial strain to long-term opportunity. Real estate has always been one of the most stable and profitable long-term investments. While the current environment may feel daunting, buyers should consider the cyclical nature of the market. The Federal Reserve is already approving a substantial reduction in interest rates, which would allow homeowners to refinance to more favorable terms.
This isn’t just about the "now" — it’s about securing a valuable asset that appreciates over time. In moments of uncertainty, those with a strategic mindset can seize unparalleled opportunities. By holding onto the vision of long-term financial growth and stability, today’s buyers can navigate short-term challenges and position themselves for future success.
Rates cut
As I write this, the Federal Reserve just announced a half-point rate reduction set to take effect on October 1. While it may take a little time for bond markets to respond, this move is a signal for even lower mortgage rates in the near future. We've already seen buyers benefit. One recently secured a 30-year fixed mortgage at 5.9 percent by buying down a few points. In contrast to last year, when rates soared near 8 percent, the current climate represents a significant improvement.
With this recent cut, we can expect further mortgage rate declines over the coming weeks. For savvy buyers, this presents an unparalleled opportunity. Right now, there’s prime inventory on the market that should already be under contract, but many remain available. This moment offers a rare chance to acquire a premier property at a compelling price, coupled with a more manageable interest rate and monthly payment.
Chris SudoreIn real estate, timing is everything. With rates easing and exceptional homes on offer, this is the perfect time to secure your dream property and benefit from both a favorable purchase price and a reduced monthly overhead. Don't wait — opportunities like this are fleeting.
This could be the spark that lights the flame again. Historically, we see a high rate of transactions in September and October, as summer vacations end and everyone gets back on a more predictable schedule of school and work. Consumer habits follow that schedule. With the rates scheduled to come down at the beginning of October, we should see a spike in buyer activity. It could happen quickly, since so many buyers saw a whole lot of houses this summer and are familiar with what’s available. Then we usually also see an uptick before Thanksgiving and again before the end-of-the-year holidays. The rate cut could spur this even more than usual.
If you’re in the market now
If you’re a buyer who's been looking but just can’t commit, the recent rate cut could mean more competition. Sure, there’s more inventory out there than we’ve seen in a few years, but you haven’t been the only one setting up showings and seeing houses. You’ll likely have company. Get your financing in order. If you’ve seen homes you love, make a short list and get ready to decide. The inventory means you’ll likely have some negotiating room regarding inspections, contingencies, and price.
Even if rates don’t lower as much as you might hope, buying a home is an investment in your future. It’s a way to build wealth for you and your family. Many of the sellers I’m working with now, bought in the 1980s and 1990s, which during these years, rates often hovered between 10 - 18 percent. They were patient, and refinanced when the rates fell. They built equity and are ready to cash out. It’s a solid plan and something to emulate. Rates will come down and you’ll have the opportunity to refinance later for more monthly savings.
If you’re a seller, you’ve got to be patient. This past summer has defied all the accumulated data about how many showings you need to get an offer. All the effort that went into getting your home in turnkey shape, and then keeping it staged and immaculate inside and out, is stressful and exhausting. There may be sellers tempted to take their homes off-market through the holidays, so the ones that remain will enjoy the benefits of less inventory.
While the predicted rate cuts will immediately benefit buyers, the longer-term effect will be more homes coming on the market. Many homeowners who wanted to move stood still with their lower mortgage rates. Whether upsizing or downsizing, they would not sell and move into a different property until rates fell.
On either side of the equation, though, you need the help of an experienced broker. One who has been through the ups and, more importantly, the downs of real estate. Trust a broker who has a track record of success through all fluctuations of the market. My team and I represent our client’s best interests at all times and lead aggressive negotiations, backed by our data-driven approach and nearly 20 years of success in the industry.
This is a real estate market like we’ve never seen. My office, team, and home are here in Madison Park, and we love helping our neighbors make the right moves for them and their future. If you have any questions about navigating this real estate market, let’s set up a time to talk.
Chris Sudore is a Madison Park Resident. He is Managing Broker Coldwell Banker Bain | Global Luxury. Reach him and learn more at KingCountyEstates.com or at Chris@KingCountyEstates.com