When Will This Real Estate Market Calm Down?: 5 Influencers To Watch Out For!

For a wide variety of reasons, many parts of this country have seen significant price increases in recent real estate transactions! We have witnessed near-record low mortgage interest rates, the pandemic, and high demand for homes in certain areas (with far more potential buyers than those looking to sell), etc. How long will this trend continue and when might the overall market calm down and normalize/correct etc? When, could, this, slow down, etc., due to a variety of factors, etc.? With that in mind, this article will briefly look at, examine, review, and discuss 5 possible influences to consider.

1. Interest rates: Interest rates are at or near record lows for an extended period of time. This has resulted in mortgage rates at or even slightly below 3%, which historically has not been seen in recent times! How long could these low rates continue and how could that affect the housing market in general? For every 1% the rates go up, the monthly maintenance costs, on a 30 year mortgage, go up, about sixty dollars! How might increasing the monthly cost by several hundred dollars affect home sales, etc.?

two. Job Security: When people feel secure in their jobs, etc., they are more willing to consider buying a house and/or improving it. These feelings cause most people to proceed, with more confidence in their long-term abilities, to making such a significant commitment, etc.!

3. Inflation Concerns: Home ownership is considered by some to be a fabulous tool for addressing inflation-related concerns. On the other hand, if/when the Federal Reserve Bank determines, believes and perceives inflation as a serious problem that needs to be managed, their process generally includes raising interest rates. When this happens, mortgages become more expensive, etc. as a result.

Four. Supply and Demand/ Prices/ Houses: The economic principle of Supply and Demand must be considered in terms of its impact on housing prices! What types of buyers want to move to a specific area? When there is lower inventory and buyers outnumber sellers, a seller’s market is created, typically causing price increases. When the opposite occurs, it often creates a buyer’s market. There are times, when something, in between, happens!

5. Local considerations: As we have seen, some regions/areas have been hotter, During this current real estate market, the rate and the time, a specific place and a house, will see their value, will escalate, most likely will also be different. In real estate, everything is often local!

No asset or market stays the same, for many reasons. Trends, conditions, perceptions, affordability, consumer confidence, inflation, etc. all contribute to markets and, inevitably, adjustments!

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