Waiting for Home Prices to Go Down? Don’t Hold Your Breath, Says This Realtor

One of the most common questions I got as a real estate expert, “When will house prices descend?”

Of course, it makes sense with the headlines that predicted accidents, recessions and the market. Get home It is a great financial decision and is natural to wait for the housing market be affordable.

Not a method of thinking that a large number of people are doing, except for real estate. Of course, home values ​​may change, but are prices Sticked at heights all the time. In part, we can blame inflation that makes everything more expensive. Also we can make a sin Massive deficiency to compete. We still do not have a house for those who want to buy between most of the United States.

It’s my job as a realtor to tell my clients Never rush get the first home they see. But still sitting outside of a large drop in house prices, you can Waiting forever.

Home prices do not cry anytime soon

Many people think that the real estate is like a share – prices rise, prices go down. If you have time on the market you can go in the lowest possible price. Not usually stocks, except for houses.

Home prices just don’t fall suddenly. The combination of factors prevents significant decrease in inflation and reducing the demand for inflation Mortgage rates emotional parcel to their property.

I have long enough to know that the apartment in the real estate industry is not in a vacuum. Let’s go into the main reasons why a big price in today’s market is not falling.

1. The supply is low, the requirement is high

In the sign, the housing market is supplied and managed by demand. When the buyer is more buyers, prices rise. Depending on what the report reads, the United States is a short place between four and six million homes.

There has been a problem for more than a decade of houses. After 2008 financial crisis, Homebuilding slowly slow down and never pulled back completely. Restrictive zoning laws and Rising construction costs It was difficult to build new houses at the required pace. In many areas, the high price of the place on new construction, encourages builders to stop builders only to higher houses Buyers for the first time by less choice.

At the same time, the demand for houses is strong. The biggest generation in the country, their biggest generations are in their home life and many decide to buy. Up to the market Request exceeds supplyHome prices will remain strong.

https://www.youtube.com/watch?v=0b2fvmmppae

2. Inflation raises home prices

If you have been in the grocery store, if you have filled your gas storage or lately, you were paid for any service, you first saw how Inflation affects prices. The apartment has no difference.

Inflation shows long-term upper pressure on prices. After the summit in early 2022, inflation began easier after inflation Federal Reserve series Interest rate increases. However, the latest information shows that consumption prices are increasing.

As inflation exceeds the value of money, material assets such as real estate are more expensive. In 2010, a house that cost $ 300,000 will only be worth $ 427,000 from inflation. Although the apartment request is temporarily cooled, home values ​​inclined to rise in time due to how our financial system works.

3. It costs a lot to sell a home

Selling a house is not as simple as they expect it online list and offers. Sellers are a process that comes with significant costs for real estate commissions, including Closing costsStructure costs and potential repair.

Sale for many homeowners is expensive and does not matter much in material sense. Sellers will prevent the fall of less houses in the market rather than putting financial hits.

4. Rate-lock effect freezes the supply

The Rate-Lock effect is one of the biggest reasons why the existing houses do not hit the market.

During the pandemic, millions of landlords were locked in Ultra low mortgage rates, some Down to 3% to 3%. These are homeowners He is eager To trade 7% of mortgage trading for the lower one of the new ones. Home values ​​rise, many homeowners do not want to receive a significant high mortgage payment for the next houses.

Up to the mortgage Prices come down significantlyMany homeowners will put the inventory tight and steadfast keeping their prices.

https://www.youtube.com/watch?v=ifbzcwtez8

5. People who sell houses also buy them

Most vendors are also buyers. Every house sold is usually replaced by another purchase. Unlike 2008, when the declaration market is flooded, today’s vendors usually move through the choice, not necessary.

There is a lot of things at the request of houses Stages of life. People are married, there are children, moving for work, transferred to low schools or looking for better schools. Even in a high-level environment in the last two years, these factors moved the housing market.

6. Homeowners see a higher value in their features

People have a deep emotional connection to their homes, and it plays a role in the price. When homeowners see that a neighbor’s house sells the best dollars, they often believe their homes are valuable. Even in slow markets, homeowners They avoid accepting low offers if not completely sell.

Unlike shares of people in a hurry to reduce losses, homeowners tend to hold their property, rather than taking a loss. This is another reason why home prices are even glue during economic crises.

Would a recession caused to reduce home prices?

If we enter a recession often, I often hear the dispute that home prices fall. It is true that the economic crisis can affect the apartments, most recessions do not cause a significant price decrease.

Historically, home prices have been stable or even rose during a break. Boys affect profitable employees who are less likely to host, and the hosts usually have enough capital to prevent difficulty. Unlike 2008, give a risky loan caused pledgeToday’s homeowners are in a stronger financial position.

Why it takes more expenses to wait for a home

In the last 60 years, home prices highly appreciated 4.6%. If you expect an apartment crash, you bet on a trend that is quite consistent.

Although home prices are stagnated, interest rates can be high, which has more impact on a small price reduction. And you can take more expenses to wait. To rent instead of purchasing Years of household capitalAnd inflation will continue to be more expensive in homes over time.

Tips for Homebuyers

If you try to decide your purchase, pay attention to your financial situation, not to come to the market time.

Financial stability: If you can afford a PaymentMake sure your projected monthly mortgage payment is convenient and durable. Must have enough money to close costs in the bank, Insurance, taxes and other landlord fees.

Review different markets: All real estate markets are not equal. Notice what happens in your special area. Florida inventory is growing when this article is still in the northeast, the Northeast is still in the very short term.

Think for a long time: Real estate is not today or tomorrow, but not about ten years. As a rule, plan for at least five or seven years to stay in your house so that the short-term market waves do not matter.

Read more: