Even though the top 2022 housing market headlines predicted a crash or a housing bubble burst for 2022, I think this terrier has the right idea about bubbles...they are poofy! Without dismissing buyer and seller fears fueled by media, here are some important realities and facts from housing economists, who are typically pessimistic, to seriously consider.
- This is not 2009 or a housing bubble 2.0.
- A market correction is not the same as a crash or bubble burst.
- Historically LOW home inventory or 3,000,000 million homes short of meeting buyer demand according to Freddie Mac estimates
- Buyer demand is still consistent and adjusting due to rapid increase in mortgage interest rates and nearly doubling of them since January 2022.
- Mortgage rates are substantially different today. This terrier would not qualify for even a newer dog house. Lenders are much stricter about who qualifies for a mortgage based on higher credit score and ability to pay requirements.
- Real estate is a solid hedge against inflation. A fixed mortgage rate locks the monthly payment from rate hikes. Homeowners who buy and hold for a minimum of 10 years, can expect a gain from the sale of their house.
- Housing foreclosures reached a peak in 2010 following the financial crisis of 2007-2009. Since then, the foreclosure rate has fallen steadily. See data from Statista Research Department here.
- All real estate is local as is every market. Focus on local market data and not doomsday fears. Nearly 40% of homes are still commanding the full list price according to the National Association of Realtors (NAR) in October 2022 press release.
- The median existing home sales prices in September 2022 was $384,800, up 8.4% from September 2021, but down from a record high of $418,800 in June 2022 according to the National Association of Realtors (NAR). Yes, there is a shift or market adjustment in progress.
In summary, the real estate market is shifting or softening with adjustments from past pandemic levels and current higher mortgage interest rates. It is not a housing bubble about to burst. It is a real estate market adjusting to both demand and supply and the impact of mortgage interest rates on home prices. It is still an opportunity for buyers on the move. And hello! It is also one for Sellers who have benefited from the highest level of homeowner equity in decades.
Are you ready to learn more about the opportunities for Buyers and Sellers in the Santa Fe NM real estate market? You can search for homes and find valuable real estate information, facts and news there. Let's connect for a conversation about our market and how I can help you benefit from what's happening today in Santa Fe real estate. Call/Text 505-660-4541 for a confidential conversation or to schedule an appointment with Emily Medvec, your local licensed and experienced professional Realtor.
Thank you for reading and/or commenting on this blog post by Emily Medvec. Image licensed from Shutterstock.
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