3 Reasons Why the Real Estate Market Shift is Needed
By Emilio DiSpirito, Team Leader and Realtor with The DiSpirito Team at HomeSmart Professionals
Turn on the news and all you hear is "gloom and doom"! They will tell you, "housing slips", "recession ahead", etc. In actuality, we are in a healthy market and the market that we had experienced recently has been one of the most challenging in history. Yes, that is right. Briefly, buyers were unable to find housing and the lack of housing and lowest on historical record interest rates have caused prices to increase rapidly. The market can not continue to increase in price the way it has due to higher mortgage rates, homeownership starting to near the point of being unaffordable for some sectors of the market and more homes now available for buyers. Let's uncover 3 key components as to why we should welcome this new market with open arms!
1.) Aspiring Homebuyers Are Now Finally Finding Homes
Over the past 2 years across nearly all markets in America, homebuyers were forced with some of the lowest levels of housing available to date! Homeowners were holding out for the "peak" which is now past us! The lack of homes available for sale, along with the subsidized mortgage rates in the 3% and 4% range allowed buyers to get a much larger home and in a better location than they previously could have. A low supply and high demand caused buyers to miss out if they were even one or two days late in finding out a home listed! Buyers were forced to place above asking price on offers and had to waive home inspections and other valuable contingencies which left the market lopsided. Roughly 65% of the buyers on the market were so frustrated that they left and are now coming back to find a much easier climate with additional homes to choose from.
2.) High-Quality Real Estate Experience
In a historic seller's market, turnkey homes can simply be listed with limited marketing and sold very quickly. Many homes were sold using new or part-time agents with a "discounted fee" and limited service. This gave rise to the number of licensed real estate agents and we now have over 2 million in the United States, 85% which sell fewer than 3 homes per year. My prediction is that a challenging market for sellers and an easier market for buyers will slash the number of real estate agents down by 30% in the next 3 years. This will leave a much more seasoned and experienced professional for homeowners to list their home with and for buyers to shop with. When working with a full time and experience Realtor, the consumer will have a more satisfying and beneficial experience.
3.) A Balanced Market is a Win-Win
Simply put, when homes continue to sell at today's pricing and appreciation starts to normalize, we have entered a healthy market. So long as buyers have the incentive to continue buying and homeownership is affordable and less costly than renting, we will see a well-balanced market which is good for both sides.