The most difficult moment for sellers and homebuyers is right now

Allie Garfinkle, a Yahoo Finance tech reporter, outlines the major hurdles that buyers and sellers face in today’s housing market.

Video Transcript

[WHOOSH]

– We know one thing for sure: buying a home in 2019 may be more challenging than buying in 2022. Allie Garfinkle from Yahoo Finance spoke to hopeful buyers and experts about the challenges of navigating today’s market. What did you learn?

ALLIE GARFINKLE Hi, Dave. It’s rough out here, to put it simply. Southern California. I am standing in front of a sign that says “for sale”. This is part of the problem. Simply put, there is a huge inventory problem.

What’s more, it’s making home-buyers’ lives even more difficult. Take a look.

DANIELLE COHEN We have been looking for a house for about two years.

ALLIE GARFINKLE David Jarvie and Danielle Cohen, both from Los Angeles face the same dilemma that homebuyers throughout the country.

DANIELLE COHEN The crazy interest rates brought an abrupt halt to the market. Now, we can’t find much on the markets. So–

DAVID JARVIE It is a very common fear that people have right now to list their home. If they don’t have the option, they won’t.

ALLIE GARFINKLE Average 30-year fixed loans hover around 6 and 1/2%. The Mortgage Bankers Association predicts that the 30-year fixed will drop to 5.2% as the Federal Reserve slows down on its aggressive rate increases. This is well below the historic average of 7 & 3/4%. Ed Fitz is a Los Angeles real estate agent and partner with The Agency.

ED FITZ In general, buyers are holding off for various reasons. This has made things very different since last spring. No one knows what the future holds for the market in Los Angeles, California or nationally.

ALLIE GARFINKLE Sellers are reluctant to reduce their prices because of the market freeze. Real estate prices are often as much about psychology and reality as they are about reality. Fitz has gathered data about this via an app called “Domicile, Game of Homes,” which is a bit like “The Price is Right.” for real-estate.

ED FITZ People who aren’t actively involved in the market, and who just guess at the prices from the ultimate selling price to the asking price, are making guesses that are higher than the house will sell. The market realities are not being seen by the average consumer.

ALLIE GARFINKLE However, sellers are being forced into lowering their asking prices. According to Realtor.com, one in five sellers across the country are dropping their asking prices. The West, Arizona, Nevada and Utah are the top three states that have the largest reductions. Realtor.com predicts that 2023 could be a no-win market for housing, which will not be friendly to either buyers nor sellers.

– She changes the energy every time she is there.

ALLIE GARFINKLE We had the pleasure of meeting Jason Oppenheim (star of Netflix’s hit series “Selling sunset”).

JASON OPPENHEIM I believe we saw the market bottom at the end 2022. Also, the peak of interest rates at 2022. So overall, I am optimistic. But that doesn’t mean the real estate markets will rise.

ALLIE GARFINKLE Danielle and David hope to find a home soon.

DANIELLE COHEN You can wait.

DAVID JARVIE But higher interest rates do affect purchasing power.

DANIELLE COHEN Yeah.

ALLIE GARFINKLE This is the truth. Although it can be difficult to find a house right now, you don’t have to give up on your dreams. It’s about completing the entire process. You can return to the studio.

– It’s not as difficult in this environment. Thank you, Allie Garfinkle.