The Liz Moore Market Watch Blog

A homeowner’s net worth is more than 40X greater than a renter’s (the average homeowner is $255,000 compared to the average renter at $6,300).

It’s time to kiss your landlord goodbye and start your long-term wealth plan by buying a house!

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#TheMooreYouKnow

Source: Federal Reserve

Welcome to Market Talk! I’m Liz Moore, President of Liz Moore & Associates, and today we’re going to talk about what’s happening in our local real estate markets as of the end of the 3rd quarter.

This past year has been characterized by some very confusing signals: multiple offers remain strong in some segments of the market, while other pockets are experiencing a definite slow down.

Let’s dig in and examine some of the underlying benchmarks and clarify exactly what is happening!

Interest Rates 

Mortgage interest rates have remained stubbornly high, longer than we anticipated earlier in the year. Depending on the loan type and number of points, rates are hovering anywhere between 6.5 and low 7’s. That’s a big jump over the 3’s in early 2022, and has definitely caused many buyers to hit the pause button on their home search. 

Most industry experts predict that rates will fall over the next 12 months:

Inventory

One of the unexpected consequences of interest rates remaining high is the negative impact that’s having on an already low inventory of homes for sale.

Nearly 71% of homeowners have rates on their existing homes lower than 4%, and as a result are determined to “stay put” rather than face getting a new mortgage at a higher rate.

The Silver Lining - Equity!

Equity is definitely the silver lining in today’s real estate market. Because of extremely strong price appreciation during the pandemic, most homeowners have record high market values, and accordingly 
significantly more equity than they did pre-pandemic. Nearly 70% of homes are completely paid for, with the owners having no mortgage at all, or have at least 50% equity.

This actually poses a new opportunity for homeowners who are considering their moving options, but are struggling with the idea of giving up their all-time-low interest rates.

Although their mortgage rates are low, other debt is carrying very high interest rates – in some cases nearing 20% for certain credit cards. And, unfortunately, Americans are carrying a high amount of additional debt right now – credit card debt is at its highest level ever – nearing $1 trillion. Student loans that have been on pause since 2020 are getting ready to kick in next month, and many Americans relied on credit cards too much over the past few years.

Sadly, half of American homeowners have less than $10,000 in savings (unless, of course, you 
count their equity).

The Opportunity

This creates an opportunity for homeowners to sell their home and unlock all of that equity. In addition to having a downpayment and closing costs for a replacement home, they can pay off student loans and credit card debt and become debt free except for a mortgage. 

So, although their new mortgage payment may be at 7%, their overall monthly payments are actually lower because they are no longer carrying additional debt. That is made even sweeter when you consider that you can refinance the mortgage if interest rates do indeed drop, which they are projected to do once the Feds get inflation under control.

In other words, just because you currently have a low interest rate, you shouldn’t necessarily put your move on hold. Every situation is different, and we would be happy to help you assess what makes the most sense 
for you and your situation.

By: Lauren Cummings

So much has changed within the real estate industry since we opened our brokerage, especially with the process buyers use to search for homes. Today, buyers  have far more control over the process!

Home Search
When it comes to searching for a home, today’s buyers have advantages with technology that wasn’t always available to them. In 2003, homes were advertised in local newspapers and homes magazines, which meant that a new listing might take more than a month to be marketed to the public due to the publication dates of 
print materials. Of course that delay  a really big deal back then, because the MLS wasn’t computerized: new listings were published in thick blue books which were delivered to REALTORS every 2 weeks. Today, consumers can access new listings immediately as MLS entry is dynamically fed to broker websites, consumer 
portals such as REALTOR.com and Zillow, and search apps like Homesnap. Liz Moore & Associates 
also dynamically promotes listings 24/7 in a variety of digital magazines.

Showings
The internet has also impacted home showings dramatically. In 2003, you had to book an appointment 
with an agent to see the interior of a home or visit at an open house. Today, many agents utilize 3D home tours 
online, enabling prospective homebuyers the ability to virtually walk through the home from the comfort of 
their living rooms. This resulted in buyers being able to make an offer on a property from across the country, 
without physically seeing it.

Contracts
New technologies have replaced the old carbon-copy versions of sales contracts, as well as the disappearing 
purple ink of fax machines. Digital signatures are common, and most real estate contracts are executed via 
email. Another change? Our sales contracts have gone from 2 or 3 pages to over 15, with multiple addenda!

Age of First Time Buyers
The age of first-time home ownership has risen over the years. In the 1970’s and 80’s, it was typical for first 
time buyers to be in their mid to late twenties. Today, it is more common to see first time buyers entering 
the market in their early 30’s. This is undoubtedly due to a combination of factors including the rise in both 
the cost of living and home ownership, as well as an increase in student loan debt.

Average Sales Prices
The average sales price of a home 50 years ago was just $23,400, while in 2022 it has climbed to $389,500. 
While that may seem shocking, the upside is that there are millions of homeowners who have built generational wealth simply by purchasing homes that appreciated over the years.

With the advent of Artificial Intelligence and other emerging technologies, it will be fascinating to see what 
the real estate experience of the future looks like!