I will try to give you the skinny on the most recent news headlines pertaining to the Burnett v. NAR et al lawsuit: Heads up, there will be a lot of news coverage surrounding this case and many sensational headlines over the next several days and months. There is still an appeals process that needs to be completed before this verdict is finalized, which could take years! The National Association of REALTORS® (NAR) has been engaged in a lawsuit in Missouri, Burnett v. NAR et al (representing all Realtors) pertaining to how buyers agents are compensated. After an 11-day trial, the 8-person jury in Kansas City came back and found NAR and other corporate defendants liable in the case. Awarding $1.78B to the plaintiffs, as this is an Anti-Trust case, those damages automatically triple, and so the figure would be $5.5B (That's a "B" for Billion!)
Something that I find very interesting and I want to mention, is that the idea of a buyers agent became a common practice during a lawsuit about 50 years ago due to Realtors being unable to ethically represent two parties while in negotiations. I mention this because as this current lawsuit unfolds I suspect this previous one will be brought up as a concern. If sellers end up offering no buyers agent commission/compensation, the most motivated agent to represent a buyer will be the listing agent, who would then be representing both sides of the transaction, this can become a very unethical situation once any negotiations occur. More on this as it unfolds, I will keep you updated!
Are we experiencing the highest interest rates in the last 20 years? YES! Has the market completely shut off? NO! Today, while rates are high, I am dealing with lots of creative financing (Seller Carried Financing) and private money loans at a lower rate than the current conventional rate. It's time to get creative people! Of course I am also dealing with cash buyers. Yes, there is always going to be cash buyers, many believe that Real Estate is a safer and possibly a higher return on investment than the Stockmarket!
I do want to dissect and hopefully explain the connection between interest rates and real estate prices for you to understand. They are in an inverse relationship (similar to all my romantic relationships - LOL). When interest rates rise, the cost of borrowing increases, making mortgages more expensive. I wish you and I could time the market perfectly to where when the interest rates drop, you buy a house, and then prices go up. Unfortunately, the two things affect each other without any delay. Higher rates can lead to a decrease in demand for real estate, where buyers find it harder to afford homes. In turn, this decreased demand can put downward pressure on property prices. Exactly what we should be experiencing now, the problem we are having now is the lack of inventory due to many people enjoying their low interest rates and lovely low month payments. As I have said before, and I will say again, life pressures are what control our market right now: The 5 D's: deaths, divorces, diapers, diamonds, diplomas. For the next year or so, I predict we will continue to experience this current market, slower (than the past three years) but still moving! Some very desirable homes with competitive bidding wars/multiple offers while other homes sit and adjust their prices. It always comes back to the root reason, your "Why" of buying or selling.
If you want to discuss any of the above topics in more depth, call or text me.
