07/13/2023
Tonight I am going to take a moment to be very serious and not try to impress you with a beautiful photo, some delicious BBQ recipe or any of my usual posts.
Instead, I am going to take a deep breath and share a brutal reality with all of you. (breath in, breath out)
I've been in the real estate industry for 30 years as of last month and I have never seen anything quite like what we are experiencing at the moment.
I've always prided myself on being forthright and honest with my clients by attempting to provide insight as to what conditions are like in order for them to be able to make informed decisions whether they are buying or selling. But I have to be completely honest, there has never been a period over that time that I am as uncertain about the future as I am right now, and that includes the lead up to the 2008 real estate market crash.
Here are some cold hard facts about the status of the market and there is no amount of sugar that is going to make this pill easier to swallow.
In January of 2021, the national median home price was $303,600 and the average 30 year mortgage interest rate was 2.65%. If you factored in a 5% down, the principle and interest payment would have been $1162.23/month based on those numbers.
As of the end of June 2023, the national median home price was $445,000, and as of today, the average 30 year mortgage interest rate is 7.52%. Using the same 5% down, the principle and interest payment is now $2,961.72/month, an increase of over 2.5 times.
Stated differently, you would need to be making over 2.5 times the income that you were a short 2.5 years ago. How many of you are making that much more today? You don't need to answer...just think about that for a moment. My guess is that there might be 1% of you that are making that much more over that period.
I have taken an even deeper dive into our local market and have noticed some additional anomalies that I will be sharing exclusively with my clients in the coming months for their benefit.
Feel free to contact me to see how I may be able to counsel you on your next real estate transaction.
According to Realtor.com®’s June housing data, growth in the inventory of homes actively for sale slowed nationally and declined in many metropolitan areas across the country as sellers continued to list fewer homes than last year and buyers competed over the remaining affordable homes for sale.