Naples home

Low interest rates have helped drive a strong real estate market in the Golden Isles since the COVID-19 pandemic swept across the nation more than two years ago.

Now, rising interest rates are impacting the national real estate market, and it may not necessarily be a bad thing.

Pat Hodnett Cooper, owner of Berkshire Hathaway HomeServices Hodnett Cooper Real Estate, said the higher rates are impacting the market in different ways.

“I believe the higher interest rates are affecting the market to some degree, but this could actually be in a buyer’s best interest,” she said. “With the market slowing down a bit and more inventory coming on the market, sellers may be more accepting of paying some closing costs or even buying down the rate for the buyer.”

Consumers are affected in various ways, depending on how they are planning to pay for their home.

“Many of our sales have been and continue to be cash or 1031 Exchanges,” she said. “The rise in interest rates does not impact them in the same manner as a buyer that must secure a mortgage.”

The higher interest rates affect the selling price of a home, and it sometimes means the buyer has to lower his or her price range to purchase a home and still afford a mortgage payment, Hodnett Cooper said.

Despite the higher interest rates, the demand for real estate remains strong in the Golden Isles.

“There are still lots of buyers leaving the bigger cities to move to paradise in the Golden Isles,” she said.

The good news is the available inventory is larger and there are more homes on the market in the region waiting for offers.

“There are still many great homes for sale all over Glynn, Camden and McIntosh counties,” she said. “Working with an informed and knowledgeable Realtor would be the best way of finding one of these. By the time the listing hits, Zillow or one of the publications, it’s likely already under contract if priced right.”

Hodnett Cooper believes interest rates will continue to rise as the market continues to adjust to the demand and economic uncertainty. It’s hard to predict how high rates will rise, she said.

“I’m thinking they may go to 8% at some point in the very near future,” she said. “Anything over 10% will be unsettling to many.”

Realtor Micki Mims Carter, with DeLoach Sotheby’s International Realty, said the buying frenzy for real estate in the Golden Isles is over but the market remains strong.

“The urgency for buyers has decreased, which makes the buying process a lot more pleasant,” Carter said. “The pace has returned to what it was pre-pandemic. 2019 was a good real estate market, just not the record-breaking market we saw in 2020-2021. That level of demand is what we are seeing right now.”

The rising interest rates haven’t affected values and sales prices yet.

“We got spoiled with these historically low interest rates,” she said. “What so many buyers don’t realize is that for all of the 1990s rates were in the 5%-6% range.”

In the early 2000s, rates rose as high as 8% before settling back to the 5% to 6% range, she said.

“The rates we are seeing now are shocking to some buyers because the rise in rates happened so quickly. Too quickly,” Carter said. “Rates are still very good. They are the same or lower than what I was accustomed to seeing in the majority of my career.”

There still aren’t as many homes on the market as before the pandemic.

“We are still seeing some homes hit the market generating multiple offers due to a lack of inventory,” she said. “According to DeLoach Sotheby’s International Realty’s most recent marketing report we have .14 years worth of inventory in Glynn County.”

The number of active listings in Brunswick is 161 with 74 of those in the North Glynn area. The islands have 162 listings, with 59 of those on the south end of the island.

“In my opinion, the location of the higher number of listings is all due to density, not market conditions,” Carter said.

Any speculation about how high rates will climb is a waste of time because the market has been so unpredictable in recent years. But Carter said she hopes they don’t climb too high.

“I would hope that the leaders of our country would learn from the past and stop rates from going into the double digits,” she said. “That would be a major concern and would drive buyers to look for creative financing options, like owner financing or borrowing from a private entity or individual.”