The pandemic fallout has wrought havoc with the stock market, causing it to plummet at record rates and to record lows. Then after that, the market was rising to giddy heights. Ultimately, we just don’t know how this will all turn out. What we do know and have had reaffirmed is that the stock market is volatile. The question for many now is how it will impact the real estate market. So let’s take a look at what this volatile stock market means for those buying or selling real estate in Fayetteville, Bentonville, or NWA.
What the Volatile Stock Market Means for Buying NWA Real Estate
The volatile stock market will impact those buying (or selling) real estate in NWA, but not as adversely as you may think. In fact, it probably benefits buyers quite a bit.
INTEREST RATES
The first thing to consider here is the current historic low interest rates, which was the result of the Fed’s second rate cut in March of 2020. Here, according to the experts, is how it shakes out: “Low interest rates mean you could buy a house and have lower mortgage payments than you otherwise would, or you could purchase a more expensive home than you would otherwise be able to afford.”
UNCERTAINTY
Still, there’s a lot of uncertainty and fear, which makes buying a little dicey. Interest rates are indeed very low, but the economy is in turmoil. And this means that job stability is far from certain (the US lost 6 million jobs in the last year), and the stock market, while it would eventually rebound, may crash to new lows at any time. So buyers can’t depend on steady employment or their investments to help them make those monthly mortgage payments.
It may also be more difficult to get a mortgage because “lenders could be more cautious than usual. They might have stricter standards to make sure they don’t issue mortgages to borrowers who might not be able to repay them. That means that it could be harder to qualify for a mortgage now than it was just recently.”
BUY NOW OR WAIT?
Whether buying (or selling) real estate in Fayetteville, Bentonville, or NWA right now is a good idea ultimately depends on your own unique personal situation. If you have the money for a down payment and all the other costs and you are certain your job is secure, now – with interest rates so low – is a good time to buy. Otherwise, it may better in this time of uncertainty to exercise some caution and wait.
Consult your local real estate agent to find out what’s going on in the local market. This should be another important element in your decision making. (Discover more by seeing my Buyer’s Guide Here.)
What the Volatile Stock Market Means for Selling NWA Real Estate
Things aren’t as dire for those buying or selling real estate in Fayetteville, Bentonville, or NWA as some would have us believe, and things are still very hopeful for sellers.
INVESTMENT HEDGE
With the stock market currently remaining volatile, real estate becomes an even better investment hedge, being a safer bet than other investments right now, especially stocks. Financial experts say that “an economic slowdown may be a reason to buy real estate since this investment speaks to a variety of investor needs, including diversification and income generation. So it is important to understand the value of property investments in a portfolio during a recession.” Typically, when the stock market is performing poorly, investors tend to turn to real estate as a safer investment – which is good news for sellers.
GOOD AND BAD
While this may be a good time for buyers, it’s a great time for sellers. And the reason for this, according to a recent survey, is that 70% of homebuyers have not had their ability to afford a down payment adversely impacted. Only “13% of respondents said the stock market volatility had impacted their ability to afford a down payment.”
BEST MARKET FOR SELLERS
Baby boomers seem to have retained their ability and desire to buy, with only 9% reporting that their ability to make a down payment has been impacted. The reason for this is that, typically, retirees and those nearing retirement “invest less of their wealth in the stock market in favor of more stable and less risky investments. It could also indicate that boomers are able to finance home purchases with other savings and equity from a current home as opposed to pulling cash from the capital markets.”
So this demographic is where sellers should concentrate their marketing efforts. Your local agent can help you with this targeted marketing.
A Good Agent More Important than Ever
So despite the ever-volatile stock market, the situation remains pretty good for those buying or selling real estate in Fayetteville, Bentonville, or NWA. It’s just that buyers and sellers may have to alter their tactics and expectations during this unprecedented time. And that means that the services of an experienced local real estate agent are more critical than ever.
Discover how I can help you when buying or selling real estate in Fayetteville, Bentonville, or NWA.
Just book a FREE Strategy Session with me Here.
Or Watch my “Pre-Listing Price Accelerator” Guide Here to see How To Maximize Your Home Sale and Prepare it for the Market.