I read one article that said the housing crisis wouldn't repeat itself.
I'll have to find it, seemed reasonable. It was based on the difference with supply and demand from 2008 or whenever the crisis was.
I'm a Realtor. Projections we are getting is housing prices will continue to increase on average. Some will depend on location as many big cities are seeing people move out due to high crime rates, high taxes, cost of living, politics...... but most areas should be flat at worst in price. Our group follows 5 Real Estate Economists closely as they have a great track record. 4 are projecting continued price increases. 1 is predicting a 1-2% short term decrease for dense populated urban cities/areas but 1-4% increases for more Rural areas (towns/areas of 100,000 or less). But projects a positive price increase for all categories after 3+ years.
Lower Middle Class and below are the ones being hurt by the higher interest rates. I feel for families with limited finances that want to buy a house because our government has really made it difficult for them. On average Rents are increasing at a much higher rate than home prices. Rich getting richer off of real estate right now, especially if they can pay cash. In our market 40% of the homes sale have been Cash and 51% of the homes over $1,000,000 were Cash purchases. Believe it or not the age category that is buying the most homes over $1,000,000 in the US is the Millennials. That surprised me.
Keep in mind 2 Economic Factors:
-Supply & Demand
-Inflation increasing Cost of Materials & Labor
On Supply & Demand this might sound strange but it is somewhat common sense. More new buyers are coming into the market than owners are dying off, by a ratio of roughly 2:1. There is a housing shortage across the country. The age group that is reaching the age they are dying or going into Nursing Homes is half of what the new buyer market is. Maybe parents are finally kicking their kids out of their basements. Also VRBO/AirBnB have made it so much easier for Investors to purchase homes to rent out Short Term. I have my phone ringing off the hook for Investors looking for good VRBO opportunities. Literally showed 13 homes/condos the last 2 days to a couple different investors.
Inflation, well prices of materials and building are increasing. Supply Chain still has some materials that haven't recovered causing delays in building. Ordering Windows or Glass right now can take 6-8 weeks if you are lucky. With the increased costs of materials New Builds have to increase in price as their costs do. This increases the value of existing homes.
Some want to compare our current market to the 2008 Crash, which is not an Apples to Apples comparison. In 2008 Inventory was so much higher, and Demand was lower. In my market Inventory was literally 6 times higher in 2008 than it is today. Now I have easily 5 Buyers for every Seller I have. Also in 2008 there was still the guidelines of the "Everybody Should be able to Buy a House" programs from the 1990's. You could get 125% refi's so literally pull cash out. We could get loans for people who had a 520 credit score. New home buyers could easily qualify for a loan with no money down even though they had a bad credit history. Most of these Loan Loopholes that were taken advantage of have been closed.
I'll tell anyone who would listen that if I would win $2,000,000 in the Lottery tomorrow I would put it all into real estate. During Inflationary Times 2 of the best investments historically are Gold and Real Estate. Don't make a rookie mistake and let Interest Rates dictate if you are going to buy or not. Marry the House, Date the Rate. If you find your Dream Home or a good investment property buy it even though rates are high as you can refinance later. Rates go up and down so if they decrease then refi and if they increase then you got a great deal with your lower rate.
