Real Estate Economics vs. Home Values
Let’s talk about the messed up economics of this Real Estate Market
Most people are running away from this topic because they don’t understand it...
And don’t want to spend the hours upon hours of research, comparison and critical thinking it takes to dissect what is ACTUALLY going on right now.
Good News… 😎
We want to run straight into it and break it down for you
The Messed Up Economics of this Real Estate Market: Unpacking The Current Market
1. Mortgage Applications are at their lowest rate since 1995:
Right now we are witnessing the lowest rate of mortgage applications since 1995. Yes, you read that right! It has been almost 30 years since we have seen the number of people applying for a mortgage this low.
2. 40% Less Home Sales (almost 3 MILLION less):
The current trailing average of sales over the last 12 months is right around 4 million. This is a huge decrease from almost 6.8 million at the peak of the pandemic. That's a massive 40% drop!
3. Mortgage Interest Rates are at their highest in 22 years:
Interest Rates have continually increased over the past several months and all of the experts are predicting them to continue to rise over the next several months.
Despite all these factors that traditionally indicate a fall in home values, we're seeing the exact OPPOSITE.
🚨 Home prices continue to rise month after month. 🚨
So what does this mean for you?
Of course, it depends on your unique situation…
However, allow us to make predictions based on research, market knowledge, and critical thinking.
➡️ Home values will continue to rise for the foreseeable future.
➡️ Eventually, we will see interest rates drop. All the current indicators point to that being in about 8 months at the earliest. BUT, when they do drop it may not be the good news you were hoping for.
So, if you are waiting for a “better rate” you may be waiting a while. Keep in mind, as you wait, home prices are still going up. The longer you wait, the more you pay…
➡️ When rates drop significantly enough to impact the market the pent-up demand or shadow demand as we like to call it (40% less sales and historically low inventory) will cause a frenzy in the marketplace.
➡️ Home prices will increase at an extremely rapid rate (Accelerated Appreciation)
➡️ Homes will be selling with multiple offers well above asking price
➡️ Buyers will be waiving inspections and contingencies to secure the home (risky move)
➡️ It will be harder to find and secure the right home for you and your family in this upcoming market than in the current market because of these factors. Not to mention you will be paying WAY more for the home.
It is critical that you stay educated and informed of the realities of the real estate market.
DATA NOT THE DRAMA
This will help you make educated and informed decisions about the largest purchase or sale of your life for most people.
That is why we have spent countless hours researching this and laying this out for you.
We truly hope this helps.
If you want to learn or discuss more let's dive deep into your personal situation and devise a plan!
We are here to serve you with the biggest asset of your life.
Let us know how we can help! Drop us a message