You’re not alone.
A lot of our clients, friends, and industry colleagues have been asking us about the state of the real estate market. Everyone's looking for a simple explanation.
We’ll likely say some stuff about real estate “being local” and how one street or market could be way different than another. Sure, that’s the truth, but it doesn’t always help our folks get what’s going on out there. Some places are just more popular than others, and real estate is pretty much a supply and demand business.
Neighborhoods ebb and flow in popularity, and home prices move accordingly. Our job is to help you understand why that’s the case, and what a home may sell for at different places along those trend lines.
In order to do that, it helps to zoom out and discuss nationwide data.
For example, Fannie Mae economists predict total 2022 home sales to fall by just over 16 percent from 2021. The reason for that? Price, mainly.
Real estate news company Inman reported on Fannie Mae’s forecast.
“Housing remains clearly on the downtrend — and has been for several months now — due to the combined effects of outsized home price increases and the significant and rapid run-up in mortgage rates,” said Fannie Mae Chief Economist Doug Duncan, in a statement.
It’s understandable why people can get confused by what seem like conflicting metrics. A decrease in sales must mean buyers aren’t interested, and thus, sellers need to adjust.
Simply put, we’re not anywhere close to what happened in 2008-09. That crazy fiasco was the result of Wall Street shenanigans. It wasn’t organic, like today’s conditions.
Unfortunately, we are cramped into a unique scenario. Buyers are more qualified than ever, but mortgage rates and lack of inventory are keeping them from actually buying. And, even though days on market are increasing, prices aren’t falling as fast as many thought. To say there are mixed signals would be quite the understatement. Today’s market is like a middle school boy trying to share his feelings … you’re going to get just enough to be confused.
Truthfully, a six-percent, 30-year mortgage is really attractive. Anything under that is even more so. It’s very likely we’ll never see under three percent again, a benchmark we’re finding too many people still consider possible. Don’t let the hope of three percent keep you from your real estate dreams.
The best way to define the current state of things is to exercise another cliché: the market is normalizing.
The 2020 to early 2022 pandemic surge is relaxing, the boil has become a simmer. From inflation policy to relocation desires, the market drivers of the last 18 months were exceptional, factors few predicted and even fewer knew how to respond to. All we could do was embrace the dynamics and ensure our clients made the best possible decisions using the data available.
And that’s all you have to worry about, as well.
When it comes to buying and selling, take each step within your comfort level until you reach a point where you need to move beyond it. That’s the place along the trail where we offer the most value.
In short, don’t let the mixed signals and weird vibe veer you off course; if you price your home correctly, everything will be awesome. And when it comes to buying, know that it’s never really a bad time, assuming you work within your budget and don’t change your mind every 10 minutes.
Questions? Concerns? Just want to talk? Hit us up. My team at The Abbey Collection is here to ensure you're comfortable and happy throughout the buying and selling process.