Given that we have experienced perhaps one of the longest and steepest price increases in home prices, many seem to be asking, will this continue, and if so, for how long and then what? Since real estate prices historically fluctuate and it is often a challenge to accurately predict trends and there is certainly no such thing as a crystal ball, when it comes to making these predictions it is wise to try. to avoid any attempt to market: time! After more than 15 years as a licensed real estate seller in New York State, I believe and acknowledge that there are at least four possible pricing trends and possibilities. With that in mind, this article will briefly attempt to consider, examine, review, and discuss 4 of these related to the residential housing market.
1. Will it continue to rise, at or near the current rate?: Most doubt that real estate prices will continue to rise, at this rate, for any length of time, into the future! Many factors created, in a way, a perfect storm, related to what we have witnessed, for about a year! Emotional stress and worries, emulating from this horrible pandemic, the desire to make certain lifestyle changes and the desire to avoid, delay, as well as near record low mortgage interest rates have contributed, as well as, in certain popular geographic areas/regions, supply and demand issues that, creating a seller’s market, have accelerated this process and results!
two. Keep going up, but at a slower, more gradual pace?: Could prices continue to rise, but more gradually? At some point (and many, I think, we have already started witnessing some evidence), many potential and qualified buyers will become discouraged and, if combined with this, more owners will attempt to cash in and sell. the pace will certainly be slower!
3. Will prices level out? How far will the potential cooling of this market go? Will we see prices stabilize and, over a period (adjustment period), make prices more stable and even? When interest rates eventually rise, as they look likely to in 2022, what will that affect prices and perceived costs, because higher rates mean higher monthly payments, etc.?
Four. Will prices decrease and, if so, why and for how long?: Since prices went up so fast and so high, could they go down at some point? Although historically house prices rise with inflation, this increase was not significantly related to inflation! While it is possible we will see a decline, most believe it will probably level off and turn back, more like what we witnessed, historically, so any period of falling prices will most likely be somewhat short!
Given that, for most, their home represents their single largest financial asset, doesn’t it make sense for potential homeowners/buyers to become better-informed consumers? Will you pay more attention to possibilities and realities?