There continues to be a low supply of single-family homes for sale in Southwest Florida, but for another reason than a year ago, said Matt O’Berski, a Realtor with Denny Grimes & Team, part of Keller Williams Realty.
Whereas for the past couple of years, high demand limited supply, higher interest rates are now doing the same.
A year ago, rates were about 5.5%. Now, they are about 7.5% and could continue to creep higher if the Federal Reserve continues to raise rates to curb inflation.
The rising rates have made for a more challenging environment among realtors, O’Berski said, but they also have provided opportunities. He had a recent lunch meeting with a potential client and gave him a pep talk.
“I said, ‘Hey man, don’t fixate on the rate,’” O’Berski said. “Because those are going to change. Rates are going to change over time. And if you wait, for example, for rates to go down from 7% to 5%, 5.5%—which is what a lot of people are saying these days—right away, immediately, everyone else is going to come out of the woodwork.”
O’Berski has a vested interest in generating more sales, but the former teacher said he went into the real estate profession to help others. And if he didn’t believe in what he was saying, he wouldn’t be saying it.
Rising rates have given some potential buyers the wrong reason to not buy, O’Berski said. Homes that would be bought within 10 days of hitting the market a year ago are spending at least a month or two on the market now.
“They’ll say, ‘I hear it’s not a good time to buy right now,’” O’Berski said. “But the reality is that your rate—you’re never going to be married to that rate. You’ve heard this said before, but you date the rate, and you marry the home. So, you find the right home for you and your family at a time right now.”
O’Berski crunched the numbers. He said the average home, about $410,000 now, would cost about $390 to $400 more a month because of the increased interest rates.
“That equates to right about $13 a day,” O’Berski said. “For $13 a day, you can almost spend that much on one cup of coffee these days.”
By streamlining their finances and tweaking them just a little bit, home ownership remains attainable for some buyers still, O’Berski said, despite the rising interest rates.
“If they can cut down on just a couple little things, their cost of living can be the same,” O’Berski said. A homebuyer today can always refinance when the rates go back down, but a potential homebuyer who waits for that to happen likely would face a more competitive home market—and higher home prices—when that happens.
“There’s no guarantee the rates are going to go down,” O’Berski said, “but what goes up must come down.”