Real estate comes in cycles, and currently there is a shift in the market which has caused interest rates to increase and sales to slow. In comparison, realtors who got into the business within the past couple of years saw a gold rush in real estate – homes selling within 24 to 48 hours, and low interest rates.
This shift has impacted people who saved up to buy starter homes in Pasadena.
“You’re getting people who were on the cusp of being able to afford a starter home in the Pasadena area bow out of it because they don’t know if they can necessarily afford it any longer because interest rates have increased,” local realtor Jonathan Torres, business partner at Lu Gordon and Associates, said.
Torres has eight years of real estate experience under his belt, dedicating himself to learning the foundation of the real estate industry under Lu Gordon’s mentorship. Within those eight years, Torres has evolved from assistant to business partner — reaching the very top level of production and sales each year with Lu Gordon and Associates at Coldwell Banker Realty.
Torres has also cultivated a strong focus on marketing. For sellers, he creates compelling print and digital marketing campaigns that help guide buyers to the home. For buyers, he writes strongly written offers that help buyers win the home.
Torres has some pieces of advice for real estate agents during these times when people, because of the higher interest rates, are taking longer to decide whether to buy now or wait for better times. First and foremost, agents have to keep in mind that real estate is a “relationship business.”
“You have to really kind of work and improve your relationships and kind of start talking to the people that trust and know you the most,” Torres said. “The agents with a presence and who have been in the business for quite some time are usually the ones that people flock to because they can trust them with their real estate needs.”
To stay in the business, realtors also need to constantly reach out to their network of friends and business associates, as well as to past clients who might be interested in whatever new information or new offerings are available. Realtors, he said, should always go back to the basics when confronted with challenging situations.
“Hold open houses, increase your marketing to let people know, and attract new customers,” Torres said. “I feel like a lot of people sometimes really want to pull away when there’s shifting markets to kind of cut corners. And I would say this is more an opportunity to lean into that, to really represent your brand and have your strong identity out there. Because if people don’t really know that you’re in the business, how do you expect for you to get business?”
For buyers or sellers, Torres said it’s important to connect with a real estate professional you’re familiar with. But there is definitely nothing wrong with exploring other options if the buyer or seller feels like they’re not necessarily connecting with the real estate person, or if your communication styles are different.
“When it comes to this, it’s very important to have an agent who has experienced the changing market,” he said. “I think that that’s just kind of a reality right now. Properties do take a little bit longer in this market to sell – unless you have a really, really wonderful home – but working with an agent who can help you navigate and set expectations, I think, is key in a shifting market.”
For homeowners that are considering selling their homes, Torres said there are certain situations when selling is a necessity – such as a sudden change in your life or ones really needs to move. But his consistent advice to clients is: don’t chase the market.
“If you really look at what industry professionals are saying right now, home prices are still strong,” he said. “Interest rates are still at a level that is lower than what they’re expected to be next year. So let’s say you are a seller and you want to sell your home – well, if your buyer pool is able to afford it, that buyer pool may not be able to afford it next year if interest rates do rise again. My fear is that next year there may be a little bit less of consumer confidence if we do in fact have the interest rates increase, like industry professionals are expecting.”
For home buyers, Torres said the same thing goes into play. They’re also spooked out by the rising interest rates, but if they’re comfortable with making a purchase now and they can afford it, buyers have to understand that if interest rates do rise, that will affect affordability.
“Now there’s another thing that you can do: always refinance if interest rates were to go lower,” he said. “Building equity is important and I would hate for people to lose out on that opportunity just because they’re hoping for some sort of signal to happen in the future that may never happen.”
You may reach Jonathan Torres at (626) 215-6073, write him at jonathan@lugordon.com, and follow him on Instagram.
