1. There is multiple bidding on many properties throughout Queens and Long Island. Inventory levels have adjusted from the oversupply of recent years, and some neighborhoods have four months or less available. Six months of homes for sale represents a balanced market – equal number of buyers and sellers – and less than six months, with more buyers than homes for sale, leads to multiple bidding. This situation may continue for a period of a year or more and is expected to drive prices up.
2. Interest rates are expected to rise as we go into 2014. The Mortgage Bankers Association in their latest Mortgage Finance Forecast projected 30 year mortgage rates will hit 4.2% by the end of the year. To gauge the impact of rising rates, a 1% increase in rates translates into approximately$50,000 less in purchasing power for the average home price of $400,000 and approximately $100,000 less in purchasing power at the higher end or for example $800,000.
3. Have a preapproval from your lender as you prepare to make offers. This process will first of all give you the price and affordability range best for your circumstances. Secondly, your offer will be complete providing a better basis by which an owner can evaluate your offer versus a competing offer.
4. Take time to consider your “must haves” and “don’t wants” in a home or apartment. Create a priority list and think realistically what features you can live without. This helps bring you more in line with what the homes you are seeing have to offer. Try and visualize your lifestyle (and your household’s) taking into consideration day-to-day activities and commute patterns.
5. Choose an experienced agent to help you. As noted in the March/April 2013 Realtor Magazine article What’s Your Data Source, “More and varied sources of information can cause confusion as consumers come across data that’s incomplete, contradictory, outdated, or flat-out wrong. That may lead buyers and sellers to erroneous conclusions about a home’s value, the prevalence of distressed sales, or the costs involved in a transaction, to name a few things.” A knowledgeable real estate agent can help you “sort fact from myth and make sense out of random data points.”