As we enter the 2025 real estate season, many are asking the same questions.
How is the real estate market? Are the interest rates coming down? Is this a good time to buy or sell?
While these are all great questions, the truth is these factors, like the stock market, are always changing.
With our smaller market in Fairbanks and North Pole, we tend to always have a demand for good homes to meet the needs of homebuyers. It is true that values go up and down like a roller coaster but the trend from the beginning of tracking real estate sales has typically gone in the upward direction. Thus, a home that sold 30 years ago will sell for much more this year if it has been maintained. Even a home with little to no updates, if maintained well, should still sell. However, the homes that are updated will sell faster and for more money.
If a seller needs to sell, our market historically will support a successful sale as long as the property is clean, maintained, easy to show and priced in line with current market values. The economic climate will affect how many buyers can buy the home but rarely prohibit the sale completely.
For buyers, interest rates drive the buying power.
When rates were at 3%, buyers could afford larger mortgages. Now with higher interest rates, the amount buyers can borrow has decreased. This puts more buyers into lower price ranges which can equate to sellers needing to adjust their list price in order to reach more buyers.
Yes, the financial climate affects every aspect of purchasing real estate. When a buyer is spending more for necessities, having a lower mortgage payment is attractive.
Everyone needs to live somewhere. If a buyer is paying high monthly rent, they are not gaining equity but simply paying for someone else’s investment. There is a season for that. However, if a buyer purchases a home, regardless of interest rates or market values, they will be growing their own investment.
Through my many years of selling real estate, I’ve seen many clients make large sums of money simply by selling the property that provided them with a home. Had they rented, they would never have reaped the benefits nor profits of their purchase.
So the bottom line is, each individuals financial situation should be the guiding light to if its time to purchase, rent or sell a property. If a person is only in town for two years, they should probably rent. Unless they plan to keep the purchase as a rental property.
Nationally, the economy does go up and down. For real estate in the Interior or Alaska, if the market values are lower, that certainly makes it a great time to buy. But if you purchase within current market values and plan to keep the property for a while, it can become a great asset in your portfolio.
If you have a property to sell, talking to your real estate professional is the best option to help decide if the time is right.
For the most part, any property can sell but there are ways to help make the sale more profitable.
In addition, having a professional help guide you in the process will help assure a successful transaction.
