The opportunity is in the deal.
With higher borrowing costs, investors can no longer rely as heavily on rapid appreciation to make a property profitable. Instead, they are looking more closely at properties that make financial sense at today's rates.
As inventory grows and sellers face more competition, opportunities are beginning to emerge. There are currently around 1.48 million homes listed nationally, and approximately 21% of listings have experienced a price reduction.
For investors, this can create opportunities to negotiate on more than just the purchase price. Seller concessions, closing-cost assistance, rate buydowns, and properties that have been sitting on the market can all help turn an average opportunity into an attractive investment.
Waiting for rates vs. buying the right property.
Rather than waiting indefinitely for mortgage rates to return to 5%, some investors are taking a different approach: buying the right property at the right price today, with the potential to refinance later if rates improve.
The key is making sure the investment still makes financial sense at today's rate. A future refinance should be an added benefit, not something the investment depends on to work.
What this means going forward.
The current real estate market isn't necessarily about being bullish on every property. It's about recognizing the right deal when it comes along.
Higher rates have slowed demand, but that slowdown can also create motivated sellers, price reductions, concessions, and less competition. For investors with patience and available capital, this may be a market where purchase price and negotiating power matter just as much as the mortgage rate.
