The changing Real Estate Market has been one of the biggest news stories of late. Slowing sales and rising inventory, but prices still rising. Is this accurate news?
The short answer is no. The media loves to report home prices as year over year vs. month over month. Home prices are indeed higher than one year ago but peaked in May and have softened since then.
What we are not forecasting is any significant crash. This slow down will not be a repeat of 2008. Homeowners have lot’s of equity and have actually qualified for their home loan. We don’t have any of the crazy lending we had leading up to the 2008 crash. In addition most homeowners re-financed to great rates over the last two years and have monthly payments lower than rent.
We are seeing an increase in inventory with homes staying on the market longer. Asking prices are coming down, mostly from aspirational prices that homeowners hoped to achieve, than a true lowering of prices.
For our areas we are forecasting not much more than a 10% decline in prices after a 35% run up in just the last 3 years. Still a great price for most sellers.
Buyers also have new opportunities with more homes to choose from and sellers willing to make more repairs or assist with an Interest Rate Buydown to get a better rate.
Our advice to Buyers is to access how long you plan to live in your new home. The question is where will prices be in 5 years, 10 years and more. If history is any guide, and with over 8% inflation, we see home values moving up over time. Our thought is that if you find the right home for your needs and are comfortable with the payment, is it really a concern if home prices dip a little as long as they are higher when you go to sell? Of course that is a question for each person to decide for themselves.
For sellers this is a more competitive time with buyers having more options. Today’s home buyer wants a “move-in ready” home. Ask your Select Group agent about our Refresh and Refurbish Program where we will advance the funds to make needed repairs and improvements to make your home shine.
All in all, while the market frenzy of the last two years has died down, the market is still healthy and offers great opportunities for both Buyers and Sellers.
If you would like to discuss the market and your opportunities, give us a call, we are always here for you- our valued clients and friends.
Article written by, Dan Jacuzzi
President of Select Group Real Estate