After, over 15 years, as a Real Estate Licensed Salesperson, in the State of New York, I believe, I have never witnessed, the type of market, we currently, are experiencing! Not only is this, an extreme, Sellers Market, but, no one, can be sure, of how long, it might continue. Many factors, have contributed to this, including: Post – pandemic, emotions, needs, perceptions and priorities; extended period, of historically – low, mortgage interest rates; rising consumer confidence; job/ employment improvements; etc. For those, who are buying, it is probably wise, to better understand, and consider, what might go wrong, when purchasing, what, to most, is their largest, personal, financial asset, when prices, are rising, extensively, and for a prolonged period, etc. With, that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 4 possibilities, which it is wise, to understand, and prepare for.
1. When mortgage rates rise?: At some point, mortgage rates will increase! When this, may, occur, and how much, is speculation, but, when rates do rise, how will that impact pricing, and the overall real estate market? The higher the rate, the more, one pays, to borrow the funds, needed, by most, to purchase a house! It also, relates, to lenders’ qualifications, in terms of what are generally, referred to, as, the economic proportions/ rations, which are generally, the standards, in terms of borrowing funds. In addition, if it costs more, monthly, how does that impact, affordability, and then, subsequently, and, eventually, prices?
2. Price resistance point: When, I see. what houses in my area, are selling for, I wonder, at what point, will there be, a price resistance, point/ level! How high, will buyers, be willing, and able to go, because, remember, most people, use a mortgage, but, must, also, put – down, a considerable, down – payment? When this is combined with Closing Costs, when will the size of this, become a significant factor, etc?
3. Supply and Demand: At present, there is a significantly, greater demand, than supply, which means, we have a Sellers Market. This creates rising prices, less competition, less time – on – market, etc. At, what point, will this balance, shift, how quickly, and to what degree, will the pendulum, shift?
4. If you try to sell in a few years: Those, selling today, especially, who have owned their homes, for a while, may see significant prices, from these sales. However, with the considerable, up – tick, in pricing, what might happen, when some current buyers, desire, or need, to sell, in a few years?
If you are considering, buying a house, the better you understand a variety of factors, the better, you will serve, your best interests, etc! Will you proceed, in a smart way?