11/22/2022
The current state of the housing market.
I've seen a wide range of real estate conditions over the years, but unlike previous major market turns, this time we've swung quickly from one extreme to the other. In just two years, most U.S. markets have seen outsized home price appreciation, followed by a sharp decline in housing demand. The whiplash of these fluctuations and the uncertainty of what will happen next can be difficult to comprehend.
The initial increase in home prices was exciting, and many homeowners began to plan their next move. However, selling your home now may result in a lower price than you would have received a year ago. Even if your home has appreciated far more than expected over the last few years, seeing a price drop in a matter of days can feel shocking — as if you missed out on a larger return. However, unless your home has depreciated to less than what you paid for it, you are not in the red — and this is critical to remember.
Only a few months ago, the most difficult obstacle for a buyer was dealing with bidding wars and the potential heartbreak of missing out on what you thought was the perfect home. Today, the focus has shifted to mortgage rate uncertainty and whether now is the best time to buy. The state of the economy is, indeed, on everyone's mind. It's okay that none of us can predict what will happen next. The truth is that markets are cyclical, and the current market is attempting to determine where it will land (albeit a bit dramatically).
Making a move
If you're a seller or a buyer (or both!) and you're stuck in a cycle of dreaming, hoping, anticipating, and dreading, here are some tips to help you get past your fears and move on to the next chapter.
Tip #1: Don't worry about finding the "ideal" time to sell or buy; there is none. What works best for you and your life is the ideal time. Some factors are obvious, such as a growing family or a new job in another state. Other reasons, however, necessitate a deeper dive. Will relocating improve your quality of life? Will you have more time, be closer to friends and family, or be closer to your favorite activities?
Tip #2: Investigate your financing options. There are numerous mortgage options available, whether you are getting a new loan, refinancing, or looking to lower your payment. A mortgage calculator can help you figure out how much you can afford in just a few minutes. Rate buydowns are another option that can help you lower your rate. Speak with a lender about your options.
Tip #3: You have more power than you realize. While supply is still limited, it is much better than it was a year ago. If you're looking to buy, you may have more options as more housing inventory enters the market. Take a deep breath and set your own pace during this time. You have more time to get to know the neighborhood, look at different housing options, and weigh your trade-offs such as monthly expenses, commute time, and schools when there are no bidding wars.
Finally, don't be disheartened. Understand what's important to you - it's your most powerful superpower right now, and it'll help you unlock your ideal scenario.
The adage "it's the journey, not the destination" is only partially true when it comes to finding your home. Your home is the most important destination and getting there can be easy and stress-free.
