West Savage active inventory is holding steady from last month, but pending sales are on the rise. Buyers are still active despite the nearly three-quarters of a point interest rate jump. (A 30-year fixed is sitting around 4.5%.) The historically-low rates had to end sometime! But the rates are still low; It's just taking us awhile to get used to it because we were spoiled for awhile!
In terms of pre-approvals, we have seen the rate increase affect the dollar amount of just a few buyers. Most buyers do not purchase up to their maximum limit, so few have really felt the crunch from a pre-approval standpoint.
Buyers this year are writing more competitive offers for the most part. Their offers are more based on market value relative to other properties they are viewing, rather than on getting a '"really good deal." In competitive situations, some buyers are sweetening the pot in other ways. Some are waiving inspections, others are offering above list price. We had one buyer recently write a humorous letter to our seller that was really rather cute, but also touched on why they seriously wanted the seller to consider their offer. Additionally, many buyers still need the seller to contribute 3% of the sales price towards their closing costs.
We are continuing to see heavy competition among buyers in the entry-level market. Short sales and foreclosures are still out there but they are fewer and far between, which has been a contributing factor to the low inventory, and the fierce competition.
This month, both single family and townhome inventory in Savage and in Scott County (as a whole) has increased. Our West Savage absorption rate is 1.85. That means if zero new homes come on the market, it will take 1.85 months to sell our existing inventory.