3 Secrets for Success in a Shifting Real Estate Market

For the past several years, home buyers have faced an uphill battle. Today, with talk of an economic recession on the horizon (or at the door) and a cooling housing market in the news, you may be curious about what buying or selling a home is like right now. However, there is more to the real estate housing market than you see in the headlines, and there is plentiful opportunity for home buyers and sellers alike. This is especially true here in California, with our unique real estate market. Local Santa Cruz Realtor, Barbara Pearson is sharing her best tips for buyers and sellers who are navigating this shifting real estate market.

1: Buyers: Get Pre-Approved & Know Your Options When It Comes to Interest Rates 

When buying a home, the first step should always be connecting with an experienced loan officer who can help you get pre-approved (not just pre-qualified) for a mortgage loan. While pre-qualification offers a starting place for you to understand the price range you may be able to afford, pre-approval takes it a step further. In the pre-approval process, a loan officer verifies your financial information and gives you a definitive maximum budget (subject to changes in mortgage interest rates). In addition, a pre-approval letter shows sellers that you are a serious buyer, can afford to purchase the home, and can close more quickly than a buyer without pre-approval.

It is also essential to understand your options with mortgage interest rates, which have been rapidly changing. Recently, mortgage rates increased to over 7% for the first time since 2001 but dropped again last week to 6.5%. Wondering why this matters? Mortgage interest rates impact real estate prices and affordability. An increase or decrease of even half a percentage point can equate to several hundred dollars added or subtracted from your monthly mortgage payment. This is especially true in Santa Cruz, where the median home price was $1,456,270 in September. 

Working with a mortgage loan officer and an experienced Realtor who can help you understand your options regarding mortgage interest rates can help you significantly lower your monthly housing payment. Your mortgage loan officer will present you with the loan products available to you and help you understand the unique benefits of each so that you can make an informed purchasing decision. Your Realtor can help you negotiate a seller buy down, which can help in multiple ways, such as: 

• permanently lowering the interest rate over the life of the loan

• temporarily lowering the interest rate by up to 3% for the first 1-3 years, depending on your specific goals.
  
  

If you are currently in the process of buying a home, be sure to ask your Realtor about these options, as they can save you a significant amount of money in the long run.

2: Sellers: Marketing Matters Even More Now

While great marketing has always been key to selling a home for top dollar, current real estate prices and market conditions place an even higher importance on displaying each home in its best light. 

When explaining the importance of marketing to buyers and sellers, Barbara uses a pair of leather boots as an example. If you saw a pair of stylish leather boots in the window of Nordstrom, you would expect them to sell at a higher price than if the same pair was sitting on the shelves at Walmart, right? That difference in price point is because of branding and marketing – and the same thing can happen with your home. Sure, you could list it as is, and you might get an offer, but would it sell at the same price it would have if you had taken the time to clean, stage, professionally photograph, and promote it with the latest digital marketing tactics? The industry shows, definitely not. 

A recent survey from the International Association of Home Staging Professionals shows that staging helps sell homes 3 to 30 times faster than non-staged competition. Further, staging can help increase the sale price by up to 20% on average. When interviewing Realtors to represent the sale of your home, be sure to ask about their marketing plan. Many real estate professionals, including Barbara Pearson, offer professional home staging with every listing. 

3: Buyers and Sellers: Real Estate is Local, Not National

Saving the best for last, the single most important tip for success in this shifting real estate market is to connect with an experienced Realtor in your area. Headlines in the national news may have you believe that the current and 2023 real estate housing market is crashing when in reality, that is not at all the case. 

The real estate housing market is local, not national. Market conditions vary from state to state, city to city, and even neighborhood to neighborhood. Therefore, connecting with a real estate professional with a deep understanding of your local area is vital. If you are looking to buy or sell a home in Santa Cruz and beyond, Barbara Pearson is a California.com-recommended professional who will help you smoothly navigate the turning tide of the market.