Obviously, only time will tell what the effects of the debt downgrade, and the current financial turmoils will have on the Crofton, MD real estate market. Initially, I believe that the effect will be largely psychological for both buyers and sellers. Since rates haven't changed yet, and homes still have a great value proposition, real estate should just go on like it did before the downgrade. I suspect it's not going to be that simple though.
Some buyers will continue to sit on the fence because of the uncertainty created. The key word in that sentence is "uncertainty." There will be caution displayed before making one of the largest financial purchases of their life. Those buyers who have to move into the Crofton, MD area because of relocation, will have less trepidation about purchasing a home, mainly because they have fewer choices.
The challenge is going to be those buyers for whom a home purchase is discretionary. If they don't have to upsize, or downsize, many of them will sit on the sidelines waiting for the dust to settle. This may not be in their best interest long term, if interest rates rise. Right now, a home purchased with todays financing rates is an exceptional value. Despite that, I can't underestimate the psychological effect the current financial uncertainty will have on some buyers. Couple that with a weak housing market in general, and there could be fewer sales moving forward.
Sellers may feel the same pressure to wait because the market may not be as robust as they anticipated. We all know that sellers have a pretty high expectation of the amount of money they're going to get from the sale of their home.
Housing is very fickle, and trying to forecast it has been pretty difficult for the past couple of years. Too many outside influences via government programs, that have changed the forecasting model. Just when that has finally settled down, this happens.
If you're currently in the market to buy or sell in Crofton, MD, or the surrounding area, sit down and have a heart to heart talk with your agent, and lender. If you've already determined that the home is a good value, that won't change in the short term. In the long term however, the thing to watch is interest rates. A slight tick up in rates can have a huge impact in your monthly payments.
By the way...these are the opinions of a Realtor®.
Not those of an economist. Truthfully, since this
has never happened before in the history of
the country, nobody knows what's really
going to happen. Hence, the challenge.
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