I've been a real estate agent since 1996, that's over 27 years serving buyers and sellers in many different markets. I've seen the up's and I've seen the down's. When anyone finds out I'm a real estate agent, the most common question I get is, "How's the market?" Today it's no different, I still get that question, however, the conversation is often finished with, "I'm going to wait". So my question to you today is, what are you waiting for?
In 2021, we had virtually no inventory, (as is still the case today), and lots of buyers; couple that with the historically low (I mean never been that low) interest rates and we saw a perfect storm of buyers willing to pay anything to buy a home and sellers walking away with tons of money in their pockets! But, in 2021 I heard many buyers say "I'm going to wait" because they didn't want to "overpay" for a house and they were SURE that the prices would come down. So those buyers waited and are still waiting with no end in sight to rising home prices. Today, rates are mid 6% and prices are, on average, 10% higher than 2021. Had they "jumped" into the market then, they would be ahead today in equity and in monthly payment.
Fast forward to December 2023. We still have virtually NO inventory, but the statement is still the same. "I'm going to wait". So I ask, what are you waiting for? Are you waiting for prices to go down? Case-Shiller reports that since 1942 home prices have gone down only twice; once in 1990 at 1% and again from 2007-2011 at 5%, 12% and 4%. So, in 81 years prices have gone down TWICE. That means the other 75 years saw increases in home values. Are you a gambler? Most of you will say no so I ask, what are you waiting for? Based on this historical data, you have a less than 7% chance that prices will go down in the next 81 years.
Are you waiting for interest rates to go down to 3% again? Freddie Mac shows that since 1981 (rates were 16.63%!) rates have continued to drop steadily but staying under 5% consistently since 2010. 2012 brought 3.66% while 2022 we saw an all time low of 2.96%. But, over the last 51years, we've only seen interest rates below 4% eight times! That means there's a 16% chance that rates will dip below 4% in the next 51 years.
7% chance of prices going down and 16% chance that rates will go under 4% in the next 365 days. Would you bet money on those odds at a horserace? A casino? On your favorite sports team? I'm pretty sure the answer is NO. The odds are NOT in your favor for either scenario. So, my question to you is, "What are you waiting for?"
Sellers have more equity today than they've ever had, my question to sellers is "What are you waiting for?" Buyers want to buy but are afraid of the current rates,my question to buyers is "What are you waiting for?"
Stay tuned for my next two blog posts: "We want to sell, but we have no place to go!" and "Marry the house, date the rate: why you should buy now even with high rates".
