Every spring, as the weather begins to warm in March, a long-awaited resident returns to the Chesapeake—the osprey. Locals are always on watch for the first arrivals back to our tributaries after their migration south, and for the pairing-off, nesting, and the chicks that will follow. There’s a lot of competition in the osprey world for the ideal nesting site, and aerial battles are common as osprey duke it out for the best tree, dock piling or telephone pole. It’s spring fever, Eastern Shore-style, and seems like a familiar scenario to anyone in the current real estate market.

Agents know that we humans aren’t immune to this kind of springtime nesting, either. And this year, the competition is especially fierce as the feverishness sparked by the pandemic continues in the real estate market. Buyers looking to settle into their new Chesapeake homes can expect to see increased prices, slim inventory, and bidding wars continue in the competitive search for that perfect waterfront or small-town location. Add into the mix the climbing mortgage rates, inflation, gas prices, and the war in Ukraine, and we’ve got a recipe for an unparalleled frenzy.

The good news? Even with rising interest rates, now is still a good time to buy especially if you plan to stay in your home for at least five years. And keeping what “rising” rates mean in the grand scheme of things is helpful, too. In February, interest rates reached a two-year high—just over 4%—which seems steep until you consider that interest rates in the early 80s were in the 16-18% range. In 2001, my first interest rate when buying a home was right around 6.75%. So there really is no need to panic.

Another factor driving demand and bidding wars is the lack of new construction. Right now, builders can only produce about 600-650K units per year based on supply chain issues and the lack of vacant land available in areas of high demand. A friend of mine in the construction industry recently attended a new home builder convention in Orlando and reported back that the numbers back this up: there’s currently a shortage of 1.3 million units for new construction.

With fewer homes, there’s increased competition for what already exists, something you can see with rising interest rates and an increasingly competitive rental market. What does this mean in real terms? That everything must be taken on a client-by-client situation. While some may find a property that would still benefit them because you don’t have any tax write offs when renting, others may stand down and wait a couple years to see if the competition softens a bit. More than ever, it’s important to educate yourself. Talk with multiple experienced lenders and shop around for the best rates and programs. And when in doubt, contact an agent you trust. I’m always happy to connect my clients with reputable mortgage brokers that have a great understanding of the local market.

All of this spring fever in the real estate market is solid news for sellers, who continue to enjoy an unprecedented seller’s market. Nationally, active listings are down 25% year over year and median prices have increased over 12%. So, if you are looking to sell your nest, this is a great time to do it. But it does beg the question—where do I go if I sell?

Currently, if you’ve been considering downsizing, the seller’s market makes it the perfect time to move to something more manageable. You’ll be very strong buyers in whatever price range or market you choose to downsize to.

Renting is another option, especially if you’re not interested in being a buyer in a seller’s market or want to avoid the stress of moving twice in a short amount of time. Rent prices are increasing, but sellers who have handsomely profited in this market can easily afford to rent for a few years as they wait for the market to soften.

Whether downsizing or moving to a rental, it is imperative for sellers to have their ducks in a row before listing. Know what your game plan is in advance and stick to it. For example, there are possibilities to rent back from your new buyer, but if that buyer has a loan, they’ll likely be limited to only allowing you to rent back for 60 days. Consider your options before you list your property and lean on your agent to help you make informed decisions if you need guidance.

Take your cue from the osprey—spring is a time for action, and despite competition, they all manage to find the spot that’s perfect for them. Don’t get distracted by inflation and interest rates. Focus on what you can control and understand what I can do to make you successful.

For buyers, that means finding a home you’re going to be comfortable in for at least 5 years in an area you enjoy. Sellers just need to get their timing right to get top dollar while finding the right spot to land and planning for the next steps. Like our friends the osprey, with a little extra effort and patience, you’ll be feathering your nest in no time.