Home prices are on everyone’s mind lately because we’ve been in such a great seller’s market and interest rates have been so low. In terms of what’s going on in our market, there are a few questions that come to mind:
- What impact will rising interest rates have on home prices?
- When is the next economic downturn and how will that affect buyers and sellers?
- Will prices continue to appreciate like they have the last couple years?
To answer the first question, as rates go up, they will have an impact on affordability. However, because they’ve been so low, buyers still have a great opportunity to buy now before they rise further and cause you to pay more money to be able to afford the same house.
If you’re a seller in the $150,000 to $300,000 price range, you’re in a great position because inventory is still low. If you’re a seller above that price range, the situation is different because rising rates have shrunk your buyer pool. In any case, you need to work with an agent who’s aggressive in their pricing, but not to the point where they price you out of the market.
As for our next potential economic downturn, it’s important to remember that real estate is cyclical. Every 10 years or so we see the market turn, and since the crash of 2007 was 11 years ago, we should see a slowdown happening soon. However, this market shift won’t have nearly the same impact as the one in 2007 because of simple supply and demand. There is still more demand for homes than there are homes available. In fact, there’s a lot of new construction happening because rising rates have caused many buyers who were sitting on the fence to buy now. Like I said, this makes now a great opportunity to buy because interest rates are still at historic lows.
The bottom line is that our market is indeed shifting. Prices are decreasing, and the market is correcting itself and moving toward more of a neutral position between buyers and seller. Within certain price ranges, though, the market is still very hot. If you have a good property listed at a good price in a great neighborhood, it will be gone before you know it.
If you’d like to know more about our market, click here for a more detailed report.
If you have any other question or you’re thinking of buying or selling a home, don’t hesitate to give me a call or shoot me an email. I’d be glad to help you.