I read and subscribe to lots of real estate newsletters, blogs, and reports. There is no dearth of information and opinions are many and varied. Prognosticators are plentiful and conflicting predictions are daily. And certainly, there is no shortage of data. Of course, all real estate is local and each submarket, neighborhood, price point, and product, must be analyzed on its own merit. So, when it comes to your individual real estate needs and goals, get local data and help from your local expert.
Even though all real estate is local, we all still want to know where the market is heading on a national level. Is a housing crash on the horizon? A housing correction? Here are just a few basic reasons why many believe that we will not experience a housing crash:
1. Low Inventory
Many more homes would need to flood the market to put significant pressure on prices. We still have a housing shortage in this country and a short supply of inventory. Plus, millennials and gen-xers are fueling the demand for more housing. A buyer’s market occurs when supply exceeds demand. To put it another way, when real estate inventory is high, and there are plenty of homes for sale. That just hasn’t happened and it is unlikely that it will.
2. High Real Estate Values and Good Equity
Prices have skyrocketed in the last two years. Even if prices go down this year, they will still likely remain higher than pre-pandemic prices. Many people currently have great interest rates, which may cause some homeowners to stay put, only contributing to the problem of a low supply of inventory and also serving to buoy prices. Bottom line — the combination of not enough new building starts and people sitting on good equity and good interest rates will keep real estate values relatively stable.
3. Better Lending Standards
Today’s real estate lending market is far from the subprime mortgage crisis of 2008. The same factors that lead to the 2008 housing crash simply don’t exist in today’s market. Interest rates are still historically low and there are also some great adjustable rate mortgages and buy down options available. Once buyers adjust to the new normal and understand some great new options, they’ll be back in the game, if they actually ever left. Many have just stepped back, but the desire to buy has not waned.
Consider Context
It’s good to look at national trends and the bigger picture, but context is everything. So, when it comes to your personal real estate situation and decisions, you have to ask yourself, “What are the influences and events related to my particular real estate market, needs, goals, and decisions?”
If you need specific answers for your real estate questions, you need to get specific information from a local expert. Go ahead and read the newspaper, listen to the news, and talk to your neighbors, but be sure your own real estate reviews and choices are made within the proper context, i.e., your personal situation and your individual desires, neighborhood and market. Because, whether you are thinking about buying or selling, your decision really boils down to your timing. And.Your.Context.
Tracy S Stice
November 3, 2022
Cherie, it is nice to read your short blog on the market. Your point about many present owners with low mortgage rates is significant. Mobility is going to be limited because a person with a 3% loan on their current home will be looking at 7% in today’s market on a replacement home. I am beginning to see developers offering incentives for the first time in many years and also offering decent commissions to buyer’s agents for selling their homes. You have seen many cycles in your career, so many people would benefit by following your experience and wisdom.