Fargo Moorhead Real Estate has always been an anomaly in the big
picture of housing. The FM area which I have lived in for over 30 yrs,
always seem to be anything but a bellwether for the market. Hmm what
do I mean by that? Fargo Moorhead just seems to avoid those crazy ups
and downs in the housing market. Yes we do have times when the market
is better, or not as good as other times, but Fargo just never has the
off the charts crazy god or crazy bad times.
1 of the thing I notice a lot is people saying "Hows the market?"Well
im here to tell you the housing market may be beginning to cool, but
it's still quite good over all.
Home sales are down from a year ago, more sellers are cutting their
asking price and mortgage rates are climbing. Surveys last week showed
30-year rates approaching or crossing 5 percent, the highest they’ve
been in seven years.
Aaron Terrazas, a senior economist at Zillow.com, said that although
the economy is strong, rising rates can cause a psychological chill.
People have been receiving news of a looming slowdown,” Terrazas said.
“They’re starting to take that into account, and they’re being more
conservative in their bidding than a year ago.”
Throughout the recovery, a shortage of listings has helped drive
prices up, at first because homeowners were reluctant to sell at
depressed prices. But this shortage is also keeping many would-be
buyers on the sidelines, as they opt to rent or stay put.
“Buyers are weary,” said Shannon Barnum, a sales agent with Modern
Market Realtors in Fargo Moorhead. “They’re sick of hearing that it’s
a sellers’ market.
Rising rates
The new dynamic is higher mortgage rates, after a decade in which they
remained unusually low.
Shannon said that while housing affordability is still excellent by
historical standards, 5 percent is a threshold that will be a test for
buyers. She said that’s especially true for first-timers who don’t
remember the double-digit rates of the 1980s.
Given the rapidly changing nature of the market, Shannon and other
agents are warning sellers that buyers are on the defensive. she’s now
including a clause in some listing agreements that asks sellers to
approve an automatic price reduction if the house doesn’t sell in 10
to 14 days
Those price reductions tended to be most common in areas that were
developed in the 1980s and 1990s and are flush with big houses that
need updating. In Rose Creek and CharlesWood, for example, price cuts
were being offered on nearly one in four listings.
Shannon Barnum, a broker associate in Fargo, says many buyers already
believe homes are overpriced, so she’s advising sellers to make price
adjustments ahead of what she expects to be a shift in the market.
“It’s been primarily a sellers’ market the last two years,” she said.
“Our buyers were getting frustrated and tired of losing their dream
homes over the frenzy of multiple offers. They decided to rent instead
and wait for prices to stabilize
