Judith Sutton ABR CRS IDS PMN ASP IAHSP SRES GREEN
Judy@JudithSutton.com 908 803-0472
THE BIGGEST QUESTIONS that NEED TO BE ANSWERED in REAL ESTATE THIS SUMMER
All real estate is local, and every ship, large and small goes up and down with the tide!
The real estate market is in a constant state of shifts and changes. Some of them are bigger or more impactful than others, but the truth remains the same: from pandemics to recessions to elections, we can never REALLY predict what’s going to happen.
You do, however, have control over how you manage through it all and how to communicate what’s happening to your best advantage. Because no matter what is going on in the world, one thing will forever remain the same: people will always need a place to call home. Keeping in touch with me will keep you in the factual loop.
So, where to start? How do I approach the question?
WHAT’S HAPPENING WITH MORTGAGE RATES?
Rising mortgage rates are no doubt one of the biggest factors impacting the housing market right now.
But it’s important to remember that the low rates of the last few years were an anomaly. (I know, no one wants to hear that!)
As inflation rises and mortgage rates climb, many may see their purchasing power shrink and their dream of homeownership fade.
However, it’s important to remember one big piece of economic wisdom: there is no better hedge against inflation than homeownership.
Historically, we have seen homeownership outperform inflation in most decades. So if there’s an asset to invest in, housing is one of the few tangible assets that tends to hold its value.
WHAT WILL HAPPEN TO REAL ESTATE IF WE GO INTO A RECESSION?
Buyers and sellers hate the word “recession.”
But again, historical context is everything. Take a look at the chart below for some serious perspective.
In 4 out of the last 6 recessions, home prices have continued to appreciate. So, if a recession happens, it does not necessarily mean home prices will decline. This is one of the most important pieces of information you need to have an understanding of now.
The other big takeaway if a recession happens: interest rates usually go up at the beginning of an economic decline, but in order to stimulate the economy, they will typically fall.
According to Fortune,
“Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough. And in many cases, they continued to fall after the fact as it takes some time to turn things around even when the recession is technically over.”
So, while the days of mortgage rates below 3% may be over, we also can’t say for sure they’re only going to go up from here. Knowing this is crucial to understand what to anticipate from today’s shifting market.
WHAT’S GOING TO HAPPEN THIS YEAR IN REAL ESTATE?
When we’re constantly being bombarded with different opinions and information, it’s easy to get lost in the noise. Consulting a professional Real Estate Agent would be a good start to get the actual factual information about the town they will be moving into.
So, while signs of a market shift become clearer each day, it’s important to remember that context is everything.
Yes, we are seeing a slowdown. However, another way to look at it: we are really just heading back toward the market pace we saw pre-pandemic, and those were still great years for real estate.
Focus on the big picture, and that’s this: the housing market is still very strong, and previous projections are already outperforming what industry experts forecasted earlier this year.
For example, all major real estate institutions are forecasting at least 6 million homes sold in 2022.
Instead of getting caught up in headlines that do more to terrify than clarify what’s really happening in real estate, cut through the noise and focus on what carries the most weight: expert-backed data and insights.
SHOULD I BUY A HOME RIGHT NOW?
This is probably one of the biggest questions to be answered right now, and it’s never been more important to have a good answer for it.
For all the reasons we mentioned above, the short answer to this question is yes.
Trying to time the housing market for that deal of a lifetime is like trying to win the lottery. And while purchasing a home today may not be as easy as it was a couple of years ago, the latest data shows that inventory levels are rising, which means more moderate price appreciation and more options for buyers. Actually, we can’t really go back in history and pick up last year’s data…
If you have put your search on pause, or just need more correct data or information, call me. I can help you sort through what is actually happening in your “neck of the woods”.
We can’t control what’s going to happen with mortgage rates or price appreciation, but we can control what we prioritize. That way, in times of uncertainty, you see these factors less as stop signs and more as opportunities for growth and change.
Remember this: the key to success in any market is staying educated, acclimating to the current market, and making sure you’re keeping the most important things front and center.
And the best way to do that this summer is to get the right information that helps YOU make the right decisions. Call me, I can help!
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