If you’re looking to buy a new home in Shreveport-Bossier City, you may wonder whether it makes more sense to sell your current house first or enter the market as a buyer. While the current market is starting to shift toward one more-favorable buyers nationwide, here in the Shreveport-Bossier City area, it’s still a seller’s market and those looking to purchase should know that when they begin putting offers on homes, they will still likely face some competition from other eager home shoppers.
What’s the market like right now?
Home prices are dropping nationally as buyer demand slows due to high mortgage rates making monthly housing payments challenging for many would-be homeowners. Here in Bossier City, home prices are still up, rising 9.4% since last year, and our current median price is $238,000. We have, however, seen an uptick in the median Days on Market (56 versus 52 back in 2021), indicating demand from competing home buyers is slowing slightly, even as the amount of inventory—represented by active listings—has been increasing. So if you’re going to be selling soon, know that there is a chance your home will be on the market a few days longer than expected, and when it comes to entering the market as a buyer, you’ll experience a little more competition if you’re choosing to stay in the Shreveport-Bossier City area, then you might if you were to go elsewhere in the country.
Ready to sell?
A fear many have with selling first and then entering the market as a buyer is the ‘limbo’ shoppers find themselves in—what if they aren’t able to secure their next home right away? What if rising mortgage rates price them out of upgrading their living situation? Let’s look at different options:
What are some financial options?
A contingent offer—less common during the pandemic but coming back into popularity as the market is cooling—is a convenient way to buy your next home. A contingency is a clause in your offer that protects you from losing money on a house if a certain condition is not met. For example, your offer may be contingent on selling your previous home by a certain date, that way you can be sure of getting into the perfect place without having to worry about financing two homes at once.
A bridge loan is an excellent option for those who have a lot of equity accrued in their current home. It’s a short-term loan that can provide funding for the next purchase by pulling from the equity you’ve earned. As a result, bridge loans and home equity lines of credit are methods of short-term financing used in real estate.
Bridge loan or home equity line of credit—what are the differences?
If you’re looking for a loan that won’t also drain your bank account, consider a home equity line of credit (HELOC) or a bridge loan. With a bridge loan, you get access to funds and repay them using your home equity. A HELOC is a better choice than a bridge loan if you’ll be itemizing your deductions during tax season because the interest may be tax deductible. Because bridge loans involve repayment alongside your current mortgage, they come with additional fees as well as a higher interest rate. Another advantage of HELOCs is that you don’t have to repay your withdraws in the course of the draw period. You can wait as many as 10 years until the repayment period. While a bridge loan gives you a lump sum for a down payment or other purchase expenses, you need to start making payments on it right away.
Have you thought about being a landlord?
The rental market is growing in Shreveport-Bossier City with many students and new graduates from Louisiana State and Southern University eager for a place to live. The advantage of being a landlord is the passive income you can enjoy from having tenants contribute to your mortgage payment. Additionally, it allows you to hold onto a property that might be appreciating in value over the long term.
Being a landlord isn’t for everyone. There are, of course, expenses involved in keeping the property maintained for your tenants and some folks don’t want to deal with the hassle of chasing down monthly rent or advertising again when renters move out. To avoid these hassles, many homeowners enjoy the benefits of hiring a management company to handle the minutia while they reap the profits coming in from renters who pay your mortgage for you—a potentially profitable endeavor.
Are you open to renting short-term?
If you want your next move to be a near-permanent one, it makes sense to give yourself plenty of time to find the perfect property. There’s nothing worse than regretting such an enormous investment, and that’s what might happen when rushing to buy something for fear of not having a place to live.
One approach many folks take is selling their house for the ideal price and then spending a few months in a rental while they search for their next purchase. This takes the urgency out of the equation. Some advantages to renting include saving money on home maintenance (since the landlord will take care of that) and trying out a new neighborhood before making a permanent commitment.
Need a real estate agent who knows this market well?
If you decide you're ready to list, or even if you're still not sure how to proceed, reach out to us at the Tammi Montgomery Real Estate Experts. We have in-depth knowledge of the Shreveport-Bossier City area including up-to-date market information and local financing options. We can also research your unique situation and help develop a strategy for how to best proceed with the sale of your home. Contact us for a free, no-obligation consultation about your plans.
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