{"id":2302,"date":"2022-12-05T12:36:02","date_gmt":"2022-12-05T12:36:02","guid":{"rendered":"https:\/\/brokernadir.com\/?p=2302"},"modified":"2022-12-05T12:36:02","modified_gmt":"2022-12-05T12:36:02","slug":"whats-next-for-our-housing-market","status":"publish","type":"post","link":"https:\/\/zentricstudio.smtgamma.com\/index.php\/2022\/12\/05\/whats-next-for-our-housing-market\/","title":{"rendered":"What’s next for our housing market?"},"content":{"rendered":"

The old Chinese saying\u00a0<\/span>” may you live in interesting times<\/span><\/em>\u00a0” applies to our current housing market. We have experienced double-digit price increases in home values in recent years. A mad rush to buy homes during the pandemic, combined with the homes being in short supply and near-zero interest rates for mortgages, inflated house prices by over 40%, shutting out many first-time buyers during the last couple of years.<\/span><\/p>\n

U.S. Federal Reserve has hiked the interest rates by a cumulative 255 basis points since March, and more are expected over the coming months, essentially guaranteeing a slowdown in the housing market which is highly sensitive to the cost of borrowing.<\/span><\/p>\n

<\/h2>\n

This slowdown vs. the one in 2007-2009<\/span><\/h2>\n

House prices fell by double-digits during the 2007-2009 global financial crisis. Cumulatively they fell by around one-third. In some cases, even more. Flawed lending products and fraudulent practices caused that financial crisis\u2014entirely different underlying factors are at work presently. Another stark difference is the equity homeowners have in their homes. 2007-2009 people had minimal equity due to zero downpayment loan products in preceding years. According to an\u00a0<\/span>August 22 article in Bloomberg<\/span><\/a>, almost half of the mortgaged homes in the U.S. are considered\u00a0<\/span>equity rich\u2013\u2013<\/span><\/em>meaning homeowners have at least 50% equity in their homes.\u00a0<\/span><\/p>\n

<\/h2>\n

What’s next?<\/span><\/h2>\n

My crystal ball hasn’t worked in decades. We are currently in a phase of uncertainty due to many factors. Here are projections of some seasoned analysts.<\/span><\/p>\n

Most agree that the housing market is steadying out and will continue on this path for the next eighteen months or so. Analysts expect the house price to increase from 2% to 14.8%. A poll of thirty property analysts put the 2023 price increase at 10.3% in May 2022. In August, they adjusted it to 14.8%. Take all this with a grain of salt because such predictions are a moving target.<\/span><\/p>\n

My biggest takeaway from these and other surveys, projections, and polls is that while the projected rate of increase in 2023 varies considerably, no one is talking about a drop in home values. Furthermore, you can disregard this if you live in your home and are not an absentee owner. Yes, there is a significant investment aspect\u00a0<\/span>in the long-term<\/span><\/em> in owning a home, but you purchased your house to live in it. The shelter is a human need; it is not an investment. It costs money. It is where you put your roots down and raise your family. The long-term valuation increase will take care of itself. There is no need to look upon and monitor your\u00a0<\/span>home\u00a0<\/span><\/em>as a stock.\u00a0<\/span><\/p>\n

<\/h2>\n

My assessment<\/span><\/h2>\n

I can confidently say that I do not have a single client who might have a downward exposure at this time.\u00a0<\/span><\/p>\n

Remember:<\/p>\n

    \n
  1. All real estate is local!\u00a0<\/span><\/li>\n
  2. Pricing a home (buying or selling) correctly is key to long-term gain!<\/span><\/li>\n<\/ol>\n

    If you bought your home at the right price and have maintained it properly, you are most likely, sheltered from the current trends. For those who bought a home within the last couple of years and paid a premium over asking, if the appraised value was lower than the purchase price, you may have some exposure. If your appraised value matched or exceeded the purchase price, you are in good shape.<\/span><\/p>\n

    Generally speaking, I expect the market to keep getting tighter for a while. Affordability will remain a crucial factor right through 2024. It plays a key role in price increases. When a first-time home buyer comes into the market, they enable a current homeowner to move up. Affordability has become a big mountain to climb for many first-time home buyers<\/a>. I do not expect that to change for a couple of years because the interest rates will not fall but rather keep rising.\u00a0<\/span><\/p>\n

    <\/h2>\n

    Evaluations<\/span><\/h3>\n

    Please\u00a0<\/span>get in touch<\/span><\/a>\u00a0with us if you have questions about your real estate holdings or want a current home evaluation. We will gladly assist you.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

    The old Chinese saying\u00a0” may you live in interesting times\u00a0” applies to our current housing market. We have experienced double-digit price increases in home values in recent years. A mad rush to buy homes during the pandemic, combined with the homes being in short supply and near-zero interest rates for mortgages, inflated house prices by […]<\/p>\n","protected":false},"author":3,"featured_media":2301,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,6],"tags":[],"class_list":["post-2302","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-footer-blog","category-real-estate-info"],"_links":{"self":[{"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/posts\/2302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/comments?post=2302"}],"version-history":[{"count":0,"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/posts\/2302\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/media\/2301"}],"wp:attachment":[{"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/media?parent=2302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/categories?post=2302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zentricstudio.smtgamma.com\/index.php\/wp-json\/wp\/v2\/tags?post=2302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}