06/07/2023
****Real estate advice for buyers****
I forecast home prices will continue to increase. But now and refinance when interest rates are lowered…. Right now inventory is very low so pricing has remained steady. It is no longer increasing and some price points have seen pressure. There are fewer multiple offer situations unless the home is under valued or in good condition and priced under $200,000.
Once interest rates are lowered, more buyers will enter the market causing multiple offer situations again and home prices will increase.
Theoretically, markets are driven by supply and demand. Home sales in the area are down 48% year over year. However, this is driven by limited inventory. I have buyer clients that want to purchase but cannot find a home they prefer…
Inventory will remain low as millions of loans have been refinanced over the last 3 years. Quicken loans had historical profit in 2020 and 2021.
Interest rates in 1996 -2000 were 7-8.5%. Since that time interest rates have steadily declined to lows of 2.75%. Home owners with extremely low interest rates are less likely to move simply from preference, and put their home on the market.
There will have to be a major collapse in the overall economy, County wide, with a major depression in order for housing prices to actually drop.
There will be areas that are hurt. Example: San Francisco has potential to see a decline. Prices have been extremely high for decades; tourism and conferences are down due to policies and filth in the streets. One of the largest hotels in the world; with 1921 rooms, just went into foreclosure…. This hotel, Union Square Hotel was just abandoned by the investment firm that owned it. This is the 3rd huge commercial complex is San Francisco to be abandoned…. I stayed at the Union Square hotel for a real estate conference in 2017 and took all of my kids to experience San Francisco. At that time it was my third trip to San Francisco and I left saying I would never go back… others obviously feel the same…
Bottom line…. Invest in areas that you know; areas that have sound policy and strong economic development and job growth; Invest in areas you plan to be long term. It is always better to build equity than to rent and build equity for someone else, as long as you stay within a sound budget. Stay abreast of the market and consider a refinance when rates drop more than 1% difference from your rate (look at break even point)
My expertise: 19 years as a top sales agent in the Country, having sold over 2000 properties. Bachelor’s Degree in engineering and Master’s degree in Real Estate Development. Owner of F.L.I. Properties, a full service real estate brokerage servicing AL and GA.
