Savannah, Ga. (Wsave) – If you’re wondering if it’s a good time to buy or sell a home, you’re not alone.
Inflation, fuel prices and supply chain disruptions and mortgage rates have left the real estate market highly contested and with many questions for buyers and sellers.
For example, just last year Georgians faced a lumber shortage due to Covid-19, which sent homebuilders short-term prices to $1,711 per thousand board feet, an amount that would cost a typical 2,000 square foot house more than $27,000. Just carving wood.
Before the outbreak, a lumber bill of about $7,000 was relative. Lumber prices have fluctuated this year, peaking at $1,336.7 in February and falling to $663.30 in June.
Georgians also face rising mortgage rates. Historically, Savannah’s loan rates have fallen in line with the national average, which is currently in the 5% range for a 30-year fixed rate. However, the city has seen tough times, according to Jared Brown, loan officer for Certified Home Loans in Savannah.
Although rates are higher, they are still at historically average levels. We saw that in the 80s the rates were 13 percent. In the 70s they were about 9%. In the early 90s, they were around 8.5%. So, historically speaking, rates are at the lower end of the historical average. They’re up from where they were a year or two ago,” Brown said.
When it comes to buying a home, Brown said, it’s about more than price, and finding a mortgage that the buyer can afford to pay each month.
“It’s not always how well they qualify on paper, but more importantly, we want to set them up for success in the future. It’s about knowing what they’re comfortable with from a monthly perspective. A lot of people can qualify on paper more than what they’re buying month-to-month. It’s more than worth it.”
He continued, “Inventories are lower, home prices are higher, and you get less for monthly payments because the interest rate is higher. That’s where most homebuyers are right now.”
However, Brown says it’s still better to buy than to rent. According to Rent Data Fair Rental Market, the average price for renting a 3-bedroom home in Chatham County this year is $1,466, up slightly from last year’s average of $1,442.
Regarding home buying and renting, Robin Allison, a realtor with eXp Realty, an organized real estate agent at Bocook Realty, says, “As a buyer, you can buy a home and your mortgage payment is significantly less than renting and you’re in a great home overall. More than you rent.”
Alison also weighed in on buying and selling a home in today’s market.
“There are some pieces of good news for buyers. Because of the shift, resale homes are sitting on the market a little longer than before. Six months ago, four months ago, a home would be listed and have 17 offers on the first day. People were paying asking price, sellers were doing nothing. Things have changed quite a bit. Houses are starting to sit on the market for longer periods of time. Sellers are starting to negotiate, offering closing costs to buyers, and possibly doing more repairs to sell their homes than they did before.
Allison recommends considering new construction incentives in the Savannah and regional areas that include current incentives.
“Builders are giving incentives to buyers. They’re offering to cover most of their closing costs, some of the big builders have their own mortgage companies and those mortgage companies have bought mortgages at low interest rates and packaged those up and are now able to sell them. So, some that offer interest rates as low as 3.99% on a 30-year loan. There are builders.
Alison also has some advice for those interested in selling their home.
Go in with some expectations unlike the last 6 months. It definitely won’t be a million deals unless you buy it right, don’t get greedy. Many sellers are greedy.
She continued, “Go in with the realistic expectation that you’ll have to pay some closing costs to the buyer, that you’ll have to do some repairs to your home. Prepare and stage your home so that it is beautiful and ready to present for sale. If it’s not in tip-top shape, people might not be excited about it.”