Market Update November 2019
Published | Written by Pamela Briggs
We are always asked "How is the real estate market?" There are news and rumors out there that the real estate market is doomed, that housing is on the verge of a bubble, or how the next downturn will be worse than the Great Recession. Many buyers are trying to time the housing market. They too are trying to wait for the “perfect time.” However, they are going to be waiting…and waiting.
Unfortunately, what they are hearing is just all noise. The facts and data simply paint a completely different picture. It’s been frustrating being a buyer. From 2012 through the first half of 2018, it has been a supply problem. That changed last year when the active inventory ballooned the second half of 2018. There was finally a lot more supply, but it was only because Demand dropped as mortgage rates climbed all the way to 5%. Everybody thought it was the beginning to the end of housing’s 6-year climb.
But that was last year, this year, interest rates dropped to 3.75%. As a result, we have now shifted from a balanced market, of where it’s not favoring buyers nor sellers, to (in some cases) a seller’s market — especially in the first-time homebuyer market. However, every market and home are unique.
For you Sellers out there, gone are the days of multiple offers and bidding wars. Today’s buyers have been brainwashed and are expecting all homes to be hit with the HGTV makeover stick as they walk into the front door. So unless you’ve completely renovated your home in the last couple of months, don’t expect buyers to beat down your door with multiple, let alone cash offers.
For the Buyers out there looking, while it may be frustrating to hear that the supply problem is back and the market is getting hotter, it is important to focus on the low interest rates and the impact that has on your payment. As a buyer, dive into the market now before it heats up further. In 2020, mortgage rates are still projected to remain low and home values are forecasted to appreciate between 2 and 4%.
So what if rates grew 1/2% in the next year? While that would still be a great rate and would not rock the housing boat much at all, on a $700,000 home, that would increase your payment $339 per month or $4,068 annually.
Even with the unfounded and misguided negative talk about a potential housing bubble or crash, the market has continued to improve, paving the way to solid demand and a rapidly dropping inventory. Once again, there is a supply problem. Everyone will catch on soon as the media reports on the lack of homes for sale through the end of the year and well into 2020.
So there is your market update in a nutshell. If you have specific questions about your needs or goals, please reach out to us at 909-631-0006. Have a wonderful Thanksgiving and Holiday Season!