Today’s real estate market is plagued by a reputation of overvaluation and speculation that a 2008 style housing market collapse is eminent. In the few months interest rates have jumped from historic lows to historic highs. The United States Fed meetings have lead to the quickest acceleration of housing market rates in history as buyers watch their buying power dissipate into thin air. Despite all the negativity and risk associated with today's housing market, it may be one the best times to buy real estate in years.
Historically, real estate prices maintain an upward trend. Recessions are inevitable and they pose a threat to a home's value, but over time home prices recover to appreciate further. Is it not strange how homes in the last century were priced similar to today's vehicles? Over time the real estate market continues to grow, despite the United States' track record of eleven recessions since 1948, according to thebalancemoney.com. A typical home value in North Carolina prior to the 2008 reset stood around 150,000; today the average home in North Carolina costs north of 230,000. Those who were able to ride out the housing market crash stayed in their homes to see one of the greatest economic recoveries in history, as prices grew exponentially. Even as buying a home at the top of the market is not a sentence to foreclosure, it would seem that buying one when the market slows is unwise unless prices significantly; but that is simply not the case.
The United States housing market is not headed for the apocalypse many buyers are sitting on the sidelines waiting for. Despite the United States' incurring recession, housing prices are likely to remain stable while ping slightly. Unlike the 2008 market crash, the 2022 housing market is dealing with a completely different animal that is more in line with the American recession of the 1970s and 1980s. Instead of over speculation and unwise lending practices, inflation is the driver of difficulty in this economy. During the Covid 19 pandemic, interest rates were slashed to rates never seen before as governments across the world dumped more money into their economies than ever before; unfortunately, they went a little too far. With all this cheap money being tossed around, those who hadn't considered selling their homes were doing so in record times and then paying well over asking price for another property. The over asking price offer was not an issue as the low rates offset the astronomical purchase price. As real estate values hit new highs, other commodities began selling in a similar fashion. The supply chain bottlenecks brought about higher costs of everyday items like toilet paper to construction materials like lumber. In the years following the pandemic, the cost of living in the United States has skyrocketed. Due to the increased cost of everything, those who have recently purchased homes will likely remain there for years as their payments are much lower than they would be if they purchased the same home with today's rates.
After all the negative aspects of the economy, why would someone buy a property in today's market? Higher interest rates guarantee homebuyers less house for the same price. Nathan Rothschild, the 19th century financier who was a member of the renown Rothschild banking family, is famous for stating," the time to buy is when there's blood in the streets." Those who bought properties prior to 2008 saw large gains in their equity leading up to the recent interest rate hikes, and still maintain most of that equity today. Those who bought into the market following the 2008 recession saw even larger gains as they purchased properties when there was "blood in the streets." With the uncertainty of the real estate market as the United States enters its most recent recession, many buyers have decided to wait it out. Sellers are now realizing this shift as their properties aren't selling in record times for record prices. The real estate market has seen more price cuts in the past six months than its seen in the past two years. Even as interest rates raise the cost of a mortgage, the market shift in the buyers direction means they can purchase property today without going over asking price, in many cases sellers are considering offers lower than asking price. Those purchasing real estate with cash enjoy the largest benefit as the rates do not affect them and a cash offer is typically preferable to a financed one. There's no debate that the United States may be entering tough times, but those who are willing to get into the market when many are holding back stand the most to gain.
Villamar Real Estate & Investment is a real estate agency that operates throughout Florida with a heavy presence in the area of Broward County, Dade County, Lee County and Orange County of the state. If you are ready to buy a home during a wonderful buying opportunity, give us a call! Not only do we specialize in property values and wise investments, we understand what's important to sellers so we can get offers accepted. Today's housing market is tricky and many are calling for an astronomical crash; but if you look past all speculation and focus on the trend of real estate throughout history, at Villamar Real Estate & Investments we can help you find a property that will not only meet your needs, but will assist you in building wealth.