There have been quite a few rumblings over the past week that the Fed may start dropping interest rates at their September meeting. Even more exciting, multiple sources, including the Greater Nashville REALTORS® economic summit NASHONOMICS last week, are suggesting we could see further rate drops in subsequent meetings after September. This news has Realtors, buyers, and sellers crossing their fingers, toes, and anything else that can cross.
A rate drop would help everyone in this market, which is why I believe it might happen. They say the housing market takes about eight months to show up in the Fed’s numbers, and I think they are finally starting to see the impact these rate hikes have had on anyone trying to buy or sell a home right now. Any uncertainty can pause a market, but these rate hikes, coupled with inflation, have placed a more permanent pause than expected.
If we do see a rate drop, what will that mean for the Nashville market? Ask any experienced Realtor, and you'll get the same answer: multiple offer situations will be back. That’s why it's so important to educate our buyers about what this will mean for them. It's great for sellers, but buyers are the ones who will be left holding the bag. Educating buyers now and showing them the difference between paying a higher interest rate for a few years and paying significantly more for a house with multiple offers compared to today's market, where buyers have a lot of negotiation power, is key.
The problem arises when we appear to be selling property for our interests instead of those of our clients. If there was ever a time to build strong, meaningful relationships with our clients, it’s now. Even if they don't listen, at least ensure they fully understand what a multiple-offer market can look like compared to the current one. With AI making a big impact in every industry, we will show our value through human interaction that can't be matched otherwise. Hopefully, we can save our buyers some headaches and money in the long run by getting them a great deal in this buyer’s market before the scale shifts back to sellers.
Deborah Vahle is a Partner on the CityLiving Group mega team at Parks and has been involved with the STR world since 2016. She is a mom of 5 and is currently being educated by her children on all of the Taylor Swift albums and easter eggs.
