Here’s why homebuyers and sellers should be confident about this market.
This hot seller’s market has been frustrating for many homebuyers. With high demand and low inventory, competition is fierce. Sellers are loving these conditions, but most of them are turning around and becoming buyers, too.
Our market is driven by supply and demand. Interest rates went down, which made demand go up. This is causing inventory to decrease and prices to go up. A lot of our clients have painful memories of the market crash in 2008 and think to themselves that today’s market is unsustainable and headed for another inevitable crash.
Today’s market is not the same as the market of 2008. Yes, there’s a frenzy of activity and prices are rising quickly, but the underlying mechanics are completely different, and that matters. The market is going through a correction and making changes.
The rate of appreciation we’re seeing right now may or may not be sustainable, but that’s up to buyers to decide. Market value is simply what a buyer is willing to pay and what a seller is willing to sell for.
Markets are cyclical, but they don’t have to crash to change direction. Even though rates are still incredibly low, they have gone up from where they were. That will affect people’s buying power and perhaps temper the market a little bit. It doesn’t look like it will change our crazy low inventory anytime soon.
When I say the market may be tempered, I’m referring specifically to the frenzy of buying, with 20 to 30 buyers for each home and crazy prices/terms.
What does buying in this market look like? It’s not the worst thing, especially if prices are still rising. That means you’ll be able to create padding for yourself should the market make adjustments. Homes are still appraising at higher values.
A buyer’s market is a sign of the market going down. If you buy in a buyer’s market, you could be surfing a downward trend for quite a while before you see any significant appreciation. As frustrating as it is to buy in a seller’s market, it’s not without its benefits.
We’re going to continue to educate you so that when you’re ready to buy or sell, you’ll have a strong plan. In this kind of market, having a plan from the beginning that’s tailored to your situation is a big advantage over others who don’t take the time to do that. The market may get softer and more supply may come in, but we don’t expect prices to drop anytime soon.
If you’re waiting to buy or sell, don’t stop to watch the market. If you have any questions about your situation or anything related to real estate, don’t hesitate to reach out via phone or email. We look forward to hearing from you.