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By Gary Kelley
Everyone is waiting for the real estate crash. A friend recently said, “I’d love to see a headline that better times are around the corner.
The popular press certainly offers plenty of doom and gloom we all see. There are elements of real estate where the struggle is real….and I do not believe there is a crash coming.
A big reason is home equity. The Wall Street journal reports US Home Equity is at $27.8 trillion…. That’s trillion with a T. That’s a huge piggy bank. And it is real wealth…. because so many own their homes or have a strong equity position.
Looking at Census and Moody’s analytics, we can also see the millennials are entering their prime home buying years. They are driving demand up…and inventory hasn’t kept pace. There are several contributing factors…. with COVID being a big one. New home construction tailed off during COVID, and many quarantined people spent lockdown improving their homes. People simply stay in their homes longer.
I’ve been fortunate to be established long enough to regularly (and thankfully) get referrals. And looking at our recent business, several of the homes are being sold by the children after the parents pass. I’m not one of those agents passing out business cards at funerals….and they do exist. We get called after the family has made the first pass for valuables and now need to sell the home.
Why am I digressing to a sad spot? We see the demand a home receives when it is cleaned out and priced well. Yes, we know the people who can clear out a home as well as the people who can look at the contents for the items worth value. We have people to do needed repairs & painting (simple stuff…not a whole renovation.) And you might be surprised what a cleaning will do.
Some people just aren’t ready to pass the house to their kids and prefer to move. 😊 We can help people sell & buy and coordinate the transactions. It’s all part of working together. The seller needs to work with us on allowing showings and our staging. When we stage a house, we generally use the sellers’ belongings and supplement them with décor items.
Homes are still coming on the market and still selling…. just at a slower pace.
The other big impact is interest rates. The Fed is going to get inflation in check. Like a diet, it is painful at times. The National Association of Realtors Chief Economist Lawrence Yun predicts mortgage rates will drop – with 30-year fixed mortgage rate progressively falling to 6.0% this year and 5.6% in 2024. Unless there is another horrible calamity, we’ll never see 2.5% rates again…. there’s not enough profit in those rates for lenders.
I’m not sure this is the message my friend wants to hear. I would tell her it’s not as bad as the nightly news might suggest, and the sun will come out tomorrow. (Although the grass is loving all this rain…so there is a bright spot!
Need tools for home search: MoveWithGary.com
Gary is heard on WCRN AM 830 and/or seen on WMCT-TV and Westborough Community Television discussing “All Things Real Estate.”
If you need advice on selling your home or buying a new one, give us a call 508-733-6005.
