Given a recent rise in interest rates, some Oregon homeowners who planned on selling this year are now wondering about holding off. One reason given is that interest rates have dampened buyer activity.
While it’s true higher interest rates make home loans more expensive, a key ingredient to selling any home is property inventory. The home supply for much of Oregon remains low by historical standards, currently less than two months of housing backlog.
For context, a ‘normal’ market is usually considered anywhere between three and six months of supply. This means we remain firmly in what’s called a ‘seller’s market,’ ideal when placing your home for sale.
Thinking of selling? Don’t despair. Instead, be prepared. Price your house right and buyers will do the rest by competing amongst themselves. For example, by pricing at the actual market value, homesellers will reach more than half, or 60% of buyers looking. Go much above that by 10-15% and the number of homebuyers who are even aware of your property drop off precipitously.
There’s good reason for this. When faced with an over priced home, homebuyers will either wait, or use the substitution principle and be willing to trade-off price for other properties with less living space, perhaps a longer commute time, or fewer home amenities. The lesson? Make buyers compete by pricing correctly.