The market IS shifting... but it's nothing like 2008!
The last few months have been a whirlwind when it comes to the economy, inflation, a recession, etc.
And if you feel a little like a deer in headlights, I can totally understand!
I’ve been through the ups and downs of real estate personally and with clients. (In 2008, we owned 11 homes at essentially ground zero for the crash, so when you ask if I’ve experienced anything like this before, I can absolutely say YES!)
That being said, this is NOTHING like 2008/2009!
Real estate caused the crash back then. Any changes in real estate right now are just responding to the general market conditions. Consumer confidence is down… Interest rates are up… Prices are adjusting. But… as soon as the rates drop again, we will likely see another shift to a seller’s market.
The Bottom Line The decision makers of the Federal level are pulling the strings right now… Pretty much when the government gets involved, everything gets messy!
And it’s also worth noting that year over year numbers are STILL higher! For instance, the average home prices across Austin were up almost 9.3% year over year. And… from July to August, the average sale price dropped little more than $500.
The fall months typically track with longer days on market and lower prices. It’s not uncommon for prices to stagnate or even decline this time of year.
What’s driving a lot of the concern in our local market is simply the “price drops” that people are seeing across the market. In most cases, they were simply overpriced to start to “test the waters” and the waters have definitely cooled!
Well priced homes are still selling, and doing so quickly! In fact, we just finished up our own fixer upper, priced on the higher end of the scale and got multiple offers at/over list price within 72 hours of going live!
So where do we go from here?
- This is a great time to purchase! You don’t have to bid over asking price. Sellers are paying title policies. Sellers are doing repairs, offering home warranties, covering closing costs, and more. And depending on whether you consider this a buyer’s market or a stable market, THIS is the time to buy… Not when it’s a red hot sellers’ market.
NOTE: When the media is telling you that real estate is on fire, it’s too late!!!
- Interest rates are temporary. Nobody has a crystal ball, but all indicators are suggesting that we’re going to see a drop in the next 18-24 months, possibly shorter. So, you can buy now and refinance later to get a lower rate. (If the feds DO reduce rates to the mid 4s next year, then you can expect a swing back towards a seller’s market)
- You have options. If you were in the market last spring where you were having to bid 10-20% over market value to get a home, it may seem crazy that you can actually make sure that a home checks most of your wishlist checkboxes off the list! That being said, don’t let TOO MANY options keep you from making a decision.
The key is simply to make an informed decision with your purchase.
- Know the numbers.
- Look at the trends in the neighborhoods you’re interested in.
- Go back and look at 18 months of data to help inform pricing.
- Real estate always beats inflation and is one of the best long term investments you can make!
