11/03/2022
I want to share this email from my mortgage person, Tyler Anderson, GRA, about the current market environment. I think he says it well:
"I wanted to share some observations on the current market that I think are important to share to your clients in today's interesting real estate market. Many buyers are wary of purchasing in today's market as they are worried about affordability and a potential "crash" in the real estate market. Here are my observations on why I don't think there is going to be a deluge of homes flooding the market putting significant downward pressure on prices:
- Builders have slowed their production limiting the amount of new homes entering the market
- Current inventory has solid financing and is in a solid equity position so sellers in most circumstances will not need to fire sale their home
- Low unemployment which allows home owners to make their payments
- Rent prices are still high and growing putting pressure on home ownership
- Home owner's are locked into their home with low rates (roughly 70% of home owners have rates under 4%)
- Inventory, even though it is increasing, is still lower than 2018, 2019 and 2020
Demand dynamics for home ownership is still extremely high with the highest number or homebuyers ever coming into the market over the next few years. Now is a good opportunity to purchase a home as there are more homes to choose from, less bidding wars, inspections being allowed and few appraisal gaps. Buyers can get into homes now with less down payment, buyers paying closing costs and the ability to utilize FHA and VA loans which were virtually non existent in the spring. Sellers and builders are also offering 2-1 buydowns (ask me for information on this program) to help with affordability for the next few years. I have a feeling rates will come down in the next year so now is a great time to take advantage of a softer market while being able to refiance when rates come back down."
Published by: Tyler Anderson, SVP of Mortgage Lending, GRA
Have questions? Contact me, Catherine Wersal - Coldwell Banker Realty for answers.
