Perspective in the Real Estate Market

Filed under: Market Comentary

It is undeniable that we’ve seen some changes in the real estate market. Changes always make people nervous. People are looking for answers about what it means: what should your takeaway be as you listen to all of the “news” in the mortgage market these days?

Looking at the Perspective

First, I want to point out something that I often say: real estate is meant to be a long-term game. We don’t know what to expect exactly in the next quarter, year, or five years. But, the cool thing about buying a house is that you will amortize a mortgage. You need to pay to live somewhere, so it makes sense to put that money towards paying down your home. Eventually, you will own it free and clear.

With regards to the current market, we’ve seen that things are slowing down. The thing that you need to remember is that sellers have been spoiled for 6 – 8 years in this market. It has been simple to put a property out on the market and watch it sell. There are usually multiple offers and offers are often received in two weeks.

I attended a recent presentation that said that normal inventory turnaround timeline is about six months. We’ve been hovering around the two to three-week range in recent years. Right now, things have slowed down, so the current timeline is about three months across the US. Everyone is nervous about this timeline because our perspective has been swayed by the unusual circumstances in recent years.

Equilibrium is a Good Thing

The real estate market fluctuates with time, and I believe that a little bit of equilibrium in the market is a good thing. If you have the long-term perspective and you are looking at your overall plan for retirement, then there is no question that it is a great time to buy.

Also, remember that interest rates are up (around the 5% range). 5% seems high compared to the past few years where people have been able to get 3% and 4% rates. But, you need to bring perspective back into the picture and remember that the first time rates ever dipped down under 5% was in 2009. If you look at a chart of interest rates in the last 2 years, rates don’t seem so great. In comparison, if you look at a chart of interest rates in the last 50 years, it appears to be an amazing time to buy. It’s all about perspective!

What it boils down to: the right time to buy a house is when it is the right time for you to find a new place for your family to lay down their heads at night. Instead of stressing about the real estate market trends, focus on the decisions that support your career and family needs.

What are your thoughts on this topic? I’d love to hear your feedback! Comment, like, and share to let me know what you think.

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