Donald M. Savastano is a real estate agent for Keller Williams Elite Realtors in Plainville, Mass. After earning his engineering degree at Northeastern University, Savastano worked in technical telecommunications equipment and component sales for 26 years. After launching successful startups, Savastano began his career in residential real estate and has worked at Keller Williams since 2014, representing clients in Massachusetts and Rhode Island, including Warren, Cumberland, Pawtucket, Seekonk and Attleboro.
PBN: Will the recent uptick in interest rates cool the real estate market soon or can we expect a continuing hot market with tight housing stock right now?
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SAVASTANO: What we have seen, in my belief, will continue through the fall of ’22: the number of buyers per open house showings has dropped. But let’s put that in perspective. People who have been considering selling over the past few years and were waiting for the “top” of the price market have really hit that point where they are putting their homes on the market. We have seen a significant increase in inventory. For example, in March for Attleboro, 13 homes were newly listed to the market for sale; in May, that number was 36.
When there are more homes to see, the buyers are spread out, and may not run into each other as often. As a result, Realtors have reported fewer people at their open houses.
Home prices without an increase over similar homes have gone under agreement very quickly, as well. Those homes that are listed with an expected price increase over their neighbor’s recently sold home have taken longer to go under agreement. This is an indication to me that prices are leveling, not decreasing by any means. As affordability changes with increased interest rates, we may see a shift in prices, yet predictors are not indicating a price decrease in the near future.
PBN: Are increasing rents motivating first-time homebuyers to take on higher-interest mortgages when they may have kept renting if rates were more stable?
SAVASTANO: Yes. Folks who are renting and are on the fence between renting and owning are pursuing loans with lenders to learn if and how much they can afford. High rents and low rental inventory is continuing to push first-time homebuyers into the purchasing market. Just last week, I showed a home to first-time homebuyers who have rented their entire lives and now looking at retirement are considering their first purchase.
PBN: Is the rising cost of flood insurance making waterfront property sales more challenging and how do you adjust for this if it does?
SAVASTANO: This is a difficult question. Certainly, the cost of flood insurance prices some out of the waterfront market. Waterfront buyers are a special group of people who search and desire to be on the water. These folks are more apt to consider the extra costs as needed if they can afford it. Those who are not strong about waterfront owning will tend away from those higher insurance costs.
PBN: What percentage of your potential buyers have chosen to wait out the current hot market and what does that mean for your bottom line?
SAVASTANO: For me, I have lost exactly one client due to stepping out of the market. That family was also put off by the number of competing offers during the highest flood of offers at every property.
For me, that was a two-fold issue for those clients. Certainly, agents have reported losing clients, especially in the below $400,000 price range. In some cases, people who could afford $500,000 can now only afford a $250,000-$270,000 home. That is significant in that price range, and it hits the traditional working class hard.
PBN: How important are virtual home tours in the market today and how has that type of marketing affected how you work with both buyers and sellers?
SAVASTANO: Since COVID began, virtual tours, online media and video of all types have become paramount when advertising homes. To capture today’s market, people want to view online first prior to making a drive out to a property. The more high-end media and visual aids provided for buyers, the more popular the home sale is. For all of my properties, photography and social media videos are created to ensure the highest interest and sales price for my sellers.
Tim Norton is a PBN staff writer. You may contact him at Norton@PBN.com.
