Home sellers in California’s real estate market are facing a challenging environment in the wake of increased interest rates to slow down inflation.
While the current inventory shortage may cushion some of the impact, experts say that home prices are expected to continue their decline in some markets.
Homebuyers, on the other hand, struggle with reduced purchasing power (by as much as 20%), causing a slowdown in the real estate market.
Here are a few strategies that home sellers can consider to deal with this market situation:
# 1 Price Realistically
With declining home prices, it’s important for sellers to price their homes realistically. Overpricing your home will only lead to a longer time on the market and result in a lower sale price.
Home sellers should consider recent market data and comparable home sales in their neighborhood to price their homes competitively.
# 2 Enhance Your Home’s Appeal
Enhancing your home’s appeal can help attract more potential buyers, regardless of the market conditions. Simple cosmetic updates, such as fresh paint, new fixtures, or landscaping, can make a big difference in your home’s saleability.
# 3 Get Creative with Financing
With reduced purchasing power, homebuyers may struggle with securing traditional financing. Home sellers can get creative with financing options such as seller carry back financing or offer seller credits to buy down interest rates to attract potential buyers.
Below is a table of $ monthly mortgage payment (Principal and Interest on a 30 Year Mortgage) using various interest rates and loan amounts.
|Interest Rate||Per $10,000||Per $100,000||Per $500,000||Per $800,000|
# 4 Stage Your Home
Staging your home can help it show its full potential to potential buyers. Home sellers should consider hiring a professional stager who can help highlight the strengths of your home and make it more attractive to buyers.
If staging or virtual staging is not an option, at the very least, do these 21 tips to home selling success.
#5 Be Flexible
With a challenging market, home sellers may need to be flexible to make a sale. Be open to negotiating terms, such as closing dates or making any health and safety-related repairs, to make your home more attractive to buyers. Also know what to expect if the appraisal comes in lower than the purchase price, discuss your options with your real estate agent.
In conclusion, while the real estate market in California is facing a slowdown, home sellers can take steps to mitigate its impact.