I’ve been comparing the real estate market to the dance floor at a wedding recently and the metaphor seems to be resonating. White Snake starts to play through the speakers, and a mass exodus commences. But when Nelly makes his way through the speakers, guests start looking around to see who is going to get that party restarted. And that’s exactly where we’re at in real estate right now from a national perspective. Who is going to go back to the dance floor first, because everyone wants in? Being the first can be intimidating but wait too long and you’ll be pushed to the outskirts of the floor as the rush is about to start.

A typical January leads to new year resolutions and an uncertainty of when to enter the market. The usual cool winter sales starts to hit home as Buyers generally stop writing contracts just before the Holidays. This year however is unlike others before as Buyers took their moment to cool off back in October and November. Why is that? Well as interest rates increased from July to the present in such a rapid fashion, Buyers started to abandon the dance floor and wait for the tune of interest rates and prices to change.

Some analysts are predicting that rates will continue to hover around 6% but many anticipate a potential drop in interest rates as inflation takes a dive, and subsequently welcomes many buyers ‘back to the dance floor.’ Inflation and interest rates will also continue to drive investment decisions as well, incentivizing more investors to enter back into the marketplace as they eye straggling sellers hoping to achieve July sales prices in a colder January market. Translation? Reduced rates, heightened buyer eligibility, more lucrative deals. How is that dance floor looking now?

Many of today’s sellers are open to getting creative when it comes to offers that they’d consider. For instance, many buyers are offsetting today’s heightened mortgage rates with 3-2-1 interest rate buy-downs and in some situations, sellers are meeting Buyers halfway (or all of the way) by taking on the buydown fee due at closing. How’s that for creativity?

Now, let’s talk about inventory. You may find yourself perusing Zillow and feeling defeated. Today, I challenge you to go revisit the list of properties you’ve created and see which are still active. You’ll likely notice an influx of “pending” status updates OR, alternatively, price reductions. What does that tell us? It tells us that buyers are still motivated, and sellers are still eager to close deals. However, this won’t last long. As Spring approaches, mortgage rates dip, and Sellers have already adjusted their expectations, this is recipe for a very busy Spring Market.

While many analysts are resting on the notion that supplies are scarce compared to pre-pandemic levels, I’m resting my advice on the notion that we’re riding an upward trend, one that will only continue to gain traction as the year progresses. While the increase in listed properties will create purchasing options, it will also cultivate that aforementioned crowded dance floor effect – more sellers, more buyers, less room for negotiation.

If you’ve got that “ready to make a move” itch, don’t let up on your search. Continue to attend viewings, lean on an expert to help you navigate loan options, and pay attention to current market trends. Remember, we’re coming off unprecedented times, and strong opportunities exist from now until the Spring market, in which case that dance floor will be crowded and the party is anticipated to continue all year long.