Trying to figure out when to buy or sell real estate is never an easy decision, and the Covid-19 pandemic threw even more confusion into the market. In the United States, it turns out the real estate market might be in serious limbo, and it may not a good time to buy or sell property as the year winds to a close.
This uncertainty couldn’t be happening at a worse time, with real estate analysts worrying that home ownership is getting out of reach, especially for millennials – which probably won’t become any better for the younger Generation Z. These concerns, however, do not translate to a housing industry that will crash like it did during the last housing market crash.
Is it a good time to sell a house? An ideal time to purchase a house? Overall, the market is still in solid shape compared to 10 years ago, but hot housing markets in major metropolitan areas struggled to keep up with strong housing construction patterns. As the year winds down to a close, sellers still have plenty of prospects interested in purchasing real estate to withstand whatever economic issues may await us in the near future.
Concern Over Fed Actions
Financial analysts are worried the US Federal Reserve’s interest rate hikes may have a negative impact on the housing market. The interest rates trickle throughout the economy, including interest rate hikes spurring higher mortgage rates for interested buyers.
Prices have remained stable, but nationwide sales are decreasing, with worry of a housing market crash sometime in the future. The price of housing increased 0.7% in August – with a 6.2% year-over-year increase – the largest seen since 1991, according to a recent Consumer Price Index report.
If the Fed doesn’t alter its course of action, the implications of a major recession would lead to people being laid off or fired from their jobs. Potential buyers will suddenly need to make immediate changes while putting the idea of house shopping on the back burner until a more stable economic outlook.
Slowing Sellers’ Market
Despite at least two years of a red-hot selling market, almost one-third of home buyers are still paying cash for their purchases. Although that might not immediately change, buyers no longer have the urgency of making a purchase the same way they would have needed to in the past couple of years.
Homeowners with property on the market should be aware that they have slightly less leverage over buyers in the current market.
Ninety eight of 148 regional housing markets have dropping home values from the highest 2022 point, according to the John Burns Real Estate Consulting firm. It’s an impressive metric, despite 500 markets are still at their peak value for potential home buyers. Current owners likely aren’t eager to give up their historically low mortgage rates, with figures of 3 percent up to 5 percent not uncommon at the moment.
Buyers should find a real estate agent that meet their needs and always insist on a home inspection before any papers are officially signed.
Options Are Available, Sort Of
Interested home buyers – or current owners looking to sell – can be forgiven, with the market going through tumultuous hot and cold swings over the past 20 years. Some home owners may choose to use a tool such as a reverse mortgage calculator to mull their options, while others seek help from a real estate agent.
Home for-sale inventory will continue to rise, but housing prices in major markets may still remain out of reach for most interested home buyers.
If the housing market crashes, then it might offer relief for renters, as monthly rental costs also continue to decline. This is strictly related to the regular housing industry and doesn’t include luxury real estate that operates within its own specific bubble.
In Summary
Whether you’ve decided to sell or buy property, there are plenty of resources to help spur ideas to take under consideration. Housing affordability will remain a prominent talking point that will not have a set market value while fluctuations and swings continue to occur.
Do not overly panic because the industry still isn’t close to a market reset that will plunge real estate into a nasty tailspin, but we’re clearly entering a new era.
Homeowners can directly speak with agents and may not have to crawl over one another to win bidding wars while prices are being slashed. Do your research and best of luck with your decisions and actions as the never-ending carousel continues to spin.
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