What’s going to happen next in the Real Estate Market?!
Who knows?! No, really… we don’t know. If I did, I’d be rich. If only I can get to the future and get back with a real estate almanac. Where is that time machine? I swore I left it in the garage right next to my unicorn.
Okay seriously, this is my blog so I’m going to give my predictions:
Interest rates: They’re going to hover around 5%. We can’t go up too much because that will drive prices down again. We can’t go much lower, because we’ll have that market frenzy of last year. For those of you who got a 3% fixed rate – congrats. It will never be lower so enjoy and laugh at your neighbors with their 5% interest rates. I’m sure you’ve already bragged about it at the neighborhood BBQ and trust me, they’re fuming.
Prices: Although some might argue with me, we’re coming out of a second boom. FACT: Values have increased by about 12% over the last two years, so to those of you who bought low you’ve made out like a bandit. For those of you buying right now – know it’s a normal market with normal fluctuations and you’ll earn slower returns (but still have the value of owning a home). So stop thinking about earning equity and start enjoying your pools and open floor plans.
Investors: They’re out of the game. The influx of investors and liquid money has increased so those margins are just too small for the risk. With the slightly inflated market a good investor is nervous; they’re pulling out and putting money elsewhere. This is giving the market back to the people who actually need a house and want to raise a family in it (you).
Short sales/Foreclosures: I get a LOT of requests for these lists, but there are NO lists currently. They’ve dried up and home owners have equity again. However, with last year’s loosened lending guidelines we might see a small second wave of short sales and foreclosure, the operative words being might and small. These 5% down conventional no PMI loans look a lot like the 0% down NINA loans from 2005. But, even if the short sale/foreclosure market comes back, those investors I was just talking about are already on it! So buyers, you will have to settle for market price.
BUT don’t lose faith—-This year is about buying for YOU, not for perceived value or equity. Go after the home you like and read my previous blog on how to do that. After all, it’s your home and you’re going to live in it. SO— know what you want and go after it!
I’m here to help.