Lot’s of people ask me every week “How’s the Real Estate market?“…if only I had a nickel for every time?! Well, here’s the best answer that I can give you this week that might not surprise you that much at all. The Real Estate market is performing great as compared to historical data comparing current mortgage rates and the viability of any measure as an investment. Low inventory of available housing is still holding the prices high. The spring market will bring higher demand which will push prices higher regardless of mortgage rates unless inventory becomes balanced, so unless you can convince about 5% of your friends to list their homes for sale right now, I wouldn’t expect house prices to change anytime soon.
We’ve observed this cycle in every election year since 1992; people hesitate due to an uncertain economic forecast and not knowing what will happen with economic policies that affect housing in the next season. That “pause” causes a plateau in the market that compresses the supply and demand for a short time going into the fall and through winter. As you’ll see in real numbers in the chart below, after the political climate settles and consumers feel better about what to expect for the next four years, the year following an election has proven to increase the number of home sales significantly in 9 of the last 11 election cycles…including the last 8 in a row dating back to 1993!
So, if you want to know my opinion of what the Real Estate market will look like in the Spring, I will simply echo the opinions of everything I am reading. 2025 is very likely to follow this same trend. At New Directions Real Estate, we are already gearing up for this and I would be happy to have a conversation with you anytime as to how it might affect you as a Buyer or a Seller. In short, if you are a Buyer that would enjoy buying with less competition, I wouldn’t recommend waiting for a lower mortgage rate. Even if rates come down, the purchase price will likely be higher due to increased demand, which will result in you paying more regardless. If you’re a Seller that also needs to buy, read the last sentence again and realize that even if you are able to sell for more, you’ll also likely need to pay more too. So, maybe you’ll want to consider selling for a solid fair market value now in the current market that is known, and hedge your bet as a buyer based on historical economic trends in one of the most predictable investment markets that has ever been known to man. #NewDirectionsRE
