I have been thinking recently about our real estate market and where is it headed? This caused me to think about our market a year ago.
- Who would have thought a year ago that home prices would only be increasing about 2% this year?
- Second, who thought a year ago that mortgage rates would be 4% or lower? I and many others thought mortgage rates would be at 5.5% by now.
- Third, who thought that home inventory levels would increase by 27% this year?
These 3 factors combined with incomes rising more than 5% a year is making housing more affordable. Thus, we are seeing record buyer demand; but bidding wars have been replaced by bidding battles. Honestly our market’s “porridge” is neither too hot or too cold, but is just “about right” it appears.
This means that consumers have an incredible opportunity to buy a new home right now. Plus, it’s easier for homeowners to sell and buy at the same time. WOW!
But, I worry that if mortgage rates drop further we may see even higher buyer demand that causes home prices to appreciate faster and we could see bidding wars again. So, take advantage of this opportunity before it passes.