Your Most Pressing Questions Answered: The Economy, The Market & More
Are we headed for a real estate crash?Let’s face it—today’s housing market is still red hot. Low mortgage rates, stable home prices, and a competitive buyer’s landscape have given sellers an edge.
The current market’s success has led many to question the long-term impacts of where we are. I hear our friends and family typically ask one of the following:
- Are we in a real estate bubble that’s bound to pop?
- Which markets are struggling right now?
- How much of the market’s success is based on low interest rates?
Whether you have questions about your current home’s equity or you’re curious about buying a home in this competitive market, I’m diving deep to help you make informed choices.
THE PANDEMIC WAS HARD ON THE ECONOMY,
YET THE HOUSING MARKET CONTINUES TO GROW.
How long can this last?
People who ask me this question may also be wondering if they should buy a home at all. They may be concerned that a future bump in the market will hurt their long-term investment.
The mortgage and real estate industries showed serious resilience last spring when the pandemic changed how the mortgage industry does business. Even with so many changes and restrictions, demand for real estate increased. In fact, the average home price was up 13.4% from the previous year while days on the market were 13 fewer than in 2019.
Inventory is still low enough to keep sellers at an advantage. For buyers, low rates have put homeownership within reach. Therefore, both the spring and summer seasons are poised to continue the market’s upswing.
Our advice to buyers is to prepare for a competitive market:
– Get preapproved for a mortgage as early as possible
– Have all required paperwork submitted correctly and on time
– Let me help you find a qualified Realtor® to guide you
– Be prepared to act quickly
Buying a home is stressful enough, let alone in this tight market. Let me help you get the keys in your hand.
I help buyers get ready for their journey into homeownership by offering expert support. Contact me with any questions you have about how to get started buying a home.
Are we living in an economic climate like 2008?
The current economic situation is very different than in 2008, and the strength of the current housing market is largely to thank for that.
Because of lessons learned in 2008, banks are better funded and homeowners are holding more accrued equity – and, crucially, much of the economic activity is focused on financial factors outside the housing market.
As many industries quickly pivoted to work from home, early fears of widespread job loss-related foreclosures have failed to materialize. Federal stimulus payments and the Paycheck Protection Program also helped offset some of the shutdown’s early effects.
So, are we in a real estate “bubble” or not?
A real estate bubble can occur when there is a rapid and unjustified increase in housing prices.
Because the bubble is (in a sense) filled with “hot air,” it pops—and a swift drop in value occurs. This leads to reduced equity or, in some cases, negative equity conditions.
Thankfully, the current market is operating very differently, and the principle of supply and demand is working just as it’s supposed to do.
Why?
Because the current market’s increased home prices are a predictable result of historically low interest rates.
Further softening any economic bumps in the road, an even stronger seller’s market throughout the remainder of the year is expected.
This should allow supply to gradually rise and fulfill demand, slowing the inflation rate for home values and offering a gentle correction where needed.
Bottom line – if you’re thinking of buying, selling, or refinancing, there are good reasons to consider doing it now.
Schedule your Annual Mortgage Review
Stay informed. Stay financially healthy.
You have checkups every year for your health, your pets and your vehicles – now we recommend one for your finances and homes, too!
What’s a Mortgage Review?
I will work with you and review your monthly payment in detail, including your credit, mortgage insurance (if applicable) and income. Next, we’ll discuss any available options. During your mortgage review, you might discover opportunities that could give you greater financial flexibility and help you save!
What Low Inventory Means for the Housing Market Going Forward
Keep these things in mind when thinking about the low inventory present in today’s housing market:
– Low interest rates & increased vaccinations will bring out even more buyers
– New home construction will help meet demand
– Sellers still have the upper hand
– Working from home has increased demand as more people seek versatile spaces
There are sectors of the housing market that are not experiencing low inventory. In these cases, the lack of available homes is producing new opportunities for relocation.
With the first vaccine rollouts, renters have begun returning to major urban centers, attracted by the sudden rise in available inventory and newly discounted rental rates. This has led some buyers to reconsider buying condominiums.
I Say It All the Time Because It’s True: It’s a Seller’s Market!
I might sound like a broken record…
But when something’s true, you’ve got to share it.
As a homeowner, you have plenty of options right now. You could take advantage of low rates by refinancing, or you could also sell for a favorable price in a high-demand housing market. Even better is that you’ll likely have buyers competing for your home.
Getting ready to sell means more than just packing boxes.
Please remember that you should be ready to sell. By this, I don’t just mean cleaning and staging your home for success.
The fast nature of the current market highlights the importance of being mentally and emotionally ready to sell. Things can move quickly, and you may find yourself going under contract sooner than you think. From there, it’s only a matter of time until closing day.
Take these steps to ensure that you’re prepared to sell with success:
– Pause before you leap. Have you lived in your home for a long time? If your home has sentimental value, give yourself and your family some time to process what this transition will mean.
– Lean on the pros. Do you need help packing or cleaning? Ask for help or hire a professional. Don’t forget about your listing agent, who will guide you on moving the process along.
By mindfully approaching the sale of your home, you’re setting yourself up for success. There’s nothing better than moving forward with the confidence that you made the right decision. Invest in yourself, and it will pay off.
What every buyer should know
– Get preapproved. This one’s a no-brainer. Without evidence of financing, you won’t get very far in today’s housing market. Contact me to get the process started!
– Make sure your financing is air-tight. Inventory is low, which means any hiccup with your loan could get you passed up for another qualified buyer. Let’s work together to ensure the strength of your financing so that you can get ahead.
– Get ready to move. Fast. If your offer gets approved, then it’s all systems go. Sellers are motivated to keep it moving, so it’s best to act when the time comes.
– Your mindset is key. Are you organized? Is your current home or apartment packed up? You Realtor and I can work together to review your situation and guide you towards a smooth purchase of your new home.
The smart way to home shop.
Get pre-approved for a mortgage today!
If you’re considering buying a house, you’re probably wondering how much you can afford. The last thing you want is to fall in love with a house that ends up being out of your budget. Or even worse, to seal the deal on a house you can’t comfortably afford.
A lot of online calculators claim that they can tell you how much you can afford, but for most homebuyers, what they end up qualifying for is often less (or different) than what their calculator guessed. So what’s a more accurate way to figure out your budget? Getting a pre-approval letter from an actual mortgage lender.
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