Let’s take a moment and quickly chat about this market and the slight shift many of us are seeing.
There has been some misinformation which is leading to some panic….
Are we experiencing a market shift, yes. Is this another housing bubble like 2008, no. Are we in/heading towards a recession? All signs point to yes. Is a recession a bad thing, no not necessarily (sometimes it’s needed).
The last 2+ years have been a whirlwind in Real Estate. Inventory was at an all time low, home prices increased at record pace, interest rates hit record lows.
The market crash in 2007/8 was the cause of irresponsible lending practices. There weren’t many requirements to obtain a loan (or multiple). Many homeowners took equity out of their homes, when home prices fell many had negative equity (28%) causing short sales and foreclosures.
This time lending practices are much more stringent, home owners have a considerable amount of equity (only 2% have negative equity) and home prices are driven up by supply and demand.
What we are experiencing now is the market plateauing, sellers may expect to see 6-8% growth per year instead of the unsustainable 21%. Not a market crash.
Homes are on the market slightly longer from 5 to 12 days while a healthy market is 3+ months.
Interest rates increased quicker than expected which has helped slow the rapid price growth, along with a much needed increase in inventory. Home values have been known to stay steady during most recessions.
To sum it up: While there is still a strong sellers market, buyers are finding some relief and opportunities that have not been present over the last couple years.
As of now there is not a need to panic, but having a knowledgeable realtor in your corner to give you good & accurate information can guide you to make the best decision.
If you have uncertainty or questions, let’s chat.