Hi Prospects & Friends!
When analyzing the current real estate market right now, the term "DOM" will be your best friend to get you through these tough real estate market times with high inflation and higher interest rates. DOM means "Days on Market", and this metric is a key metric on any property if used properly and appropriately at the right time. Example would be Tom doesn't currently like the interest rates right now, and doesn't like what his mortgage payment would be because of the increases the Fed did. Tom decides that he doesn't want to sit on the sidelines and "wait it out" for the high inflation and high interest rates to come down, so he takes immediate action. Tom sees a home that has been sitting on the market in his area he wants to possibly buy to move into for about 192 days now. Tom instantly realizes this home has a 20% discount, and decides to red flag this house to monitor it more in depth. While Tom is still analyzing this current home he likes, he realizes if he can discount the home much lower as it ages on the market, then the current higher interest rates wont affect him much. So Tom decides that he wants to continue to "wait it out" specifically for this home for another 2 more weeks with a cap of one month max. Why would Tom want to do this? Tom instantly knows he will be at a 30% discount, and this will help keep his mortgage payment more affordable against the higher interest rates happening right now. What are the risk of this? Possibly someone else coming into bid on the home while you're "waiting it out" and they are ignoring the DOM and just want the house and really don't care about discounting anymore since they can "afford it at it's current price". So to avoid this from happening look for homes with very little "attention" that you like and monitor those instead. Conclusion here, is yes the current real estate market is being affected by the high inflation and higher interest rates, but if you use the "DOM" metric it will balance out these current real estate issues, and make the numbers work more properly and appropriately for the home you're wanting.
