|Lots of people are wondering and many have asked the magic question.|
|Many people are wondering if prices will come down. There’s lots of evidence to show that prices will slow down and level off for a bit but not a lot of evidence so far…at least here in Central Florida… that prices are going to have a significant drop off anytime soon. You might be thinking… “Of course Todd… your a Realtor you have to have a rosy outlook on housing.” Well you would think so, but I want to be real with everybody and the market affects everyone and everything…so I like to pay attention to the good and the bad of the market, what is happening and what could happen. |
First reason we probably wont see a crash is… the housing market saw little increase in inventory over the past 10 years. Even with all the building there is still a demand that isn’t being filled. Housing inventory is still at historical lows and with supplies still being behind that is probably going to continue.
Second borrowers are less likely to default now thanks to lessons learned from the 2008 crash. Lending institutions are more scrutinized and have tighter standards for lending.
Third there were more than a Trillion dollars in loans made to people with a credit score of 760 or higher. That’s considered a great credit score. Part of that credit score is how much debt the borrower has versus income and credit which usually is a great barometer on whether the borrower can afford the home loan and a few emergency money issues along the way.
4th reason is first time homebuyers are 31% of the market which is the largest share of the market. (According to the National Association of Realtors.) Millennial home buying demand is up with Gen Z right behind. This means that the home buying pool is deep and will probably remain strong for years to come.
What is more likely is we will see a slowing of the pace of the price inflation as rates go up and some people cant afford the house they could before. (Click here about raising rates.) We will probably still see prices go up…just not at the crazy rate they have been going. Some house prices may drop as some sellers panic that they didnt get the offer they want in 2 weeks and end up lowering their prices.
Now that can all change of course just like anything else if the rates keep going up and scare too many people out of the market. Or if commodities like building supplies continue to be in short supply and prices for them go through the roof. If builders stop building and people drop out because of fear (see latest new home building stats here) that could cause people to drop out of the market and the fact existing home inventory is so low it might make existing homes too high which will affect buyers as well. A lot of what might cause the next slow down is just plain fear. People hear there might be a recession and stop spending and put off large purchases like a home or car. The war in Ukraine of course is not helping things and if gas prices stay high everything will continue to go up or at least remain at the higher levels they are at now, which will also affect buying patterns of homebuyers.
So you can wait to see what happens or you can buy that home you want now. You are going to be paying someone. You are either going to be paying more for that home you want or you are going to be paying more in rent (see rent price stats here) for that home someone else owns and they are using your money to pay their mortgage.
Orlando Homes For Sale– Todd Mowry Realtor. Specializing in Real Estate in Orlando, Winter Park, Maitland, Waterford Lakes and surrounding
communities. I have over nine years of experience in advising buyers and sellers on how to make the most well informed decisions for themselves. Call or text me at 407-435-5220 even if you just need to ask a question from an experienced and dependable Realtor.