While home prices in many parts of the United States are still high, they may finally be starting to stabilize. Some of this may be seasonality, since the spring and summer tend to be the time of the year when demand is strongest; but it could also be that buyers have had enough of sellers demanding high prices with no contingencies. We still are five million housing units short to fill demand; but at some point reason starts to prevail.
The end result is fewer bidding wars though they are still happening for desirable properties than was the case at the peak of the market. And, buyers are less likely to sign deals with out contingencies for repairs that may be identified by inspections. So, this could be a good time for buyers to strike particularly those with lower down payments while mortgage interest rates are very low. Sellers may be willing to negotiate a big off their list prices. A very good time to buy could be between Thanksgiving and Christmas when the real estate market traditionally tends to slow down.
There are so many what if's that can impact the real estate market. Unfortunately, what happens in Washington DC does not stay in Washington DC. New government spending if approved by Congress could add to inflation. If inflation goes up, it will force the Federal Reserve to raise interest rates charged banks. If banks have to pay more for money, they will raise mortgage interest rates, which actually could bring housing prices down a bit. However, if inflation goes through the roof, it will raise the cost of construction for new homes, which is always the base line for the value of existing homes. So, we are not likely to be in down market that favors buyers for a few years.
In any case, buyers are getting a glimmer of hope as really hot real estate markets may cool down just a bit. Always remember, there are no bargains in real estate. If you buy crap, you will own crap. So buy in great locations with good schools because those will be the safest investments if we have a swing in the market. And, don't buy unless your horizon in the home is at least 5 years just in case we do have a downturn related to real estate values. Look at a home as an investment, not just a place to live.
At Paragon, we work clients to sell and buy homes at the best prices possible all over the country. We can provide expert advice in the process, since we assist people with life decisions.
