Homes are selling fast and inventory just can’t keep up with the demand.
But there are still some big questions surrounding the housing market right now holding back a lot of buyers and sellers.
And being able to answer them could make or break how successful you are this spring.
Here’s what you need to know so you can educate your sphere right now.
WILL WE SEE MORE INVENTORY THIS SPRING?
Recent years have seen that seasonality blur as more and more people decide to buy or sell a home no matter what time of year it is.
What we do know is that while we’ll probably see more homes hit the market this spring, supply is still too low to keep up with demand.
So, even if more homes do come on the market compared to previous months, there are plenty of willing and ready buyers waiting on the sidelines to scoop them up.
The best way to prepare your clients for this competitive market is to make sure they’re ready to move fast, be patient and stay flexible.
WHY ARE PRICES RISING SO QUICKLY?
But according to recent expert projections, we aren’t at the top of the market.
But before we dive a little deeper into that, we need to explain a couple of things.
First, with both Millenials and Gen Z now in the buyer group, there isn’t enough existing inventory to keep up with the amount of aspiring homeowners. Second, we didn’t build enough homes in the last decade to keep up with the demand.
This leads us directly to our next big question.
SHOULD I WAIT TO BUY UNTIL PRICES GO DOWN?
The big difference between now and then is this: this price appreciation is a direct result of low inventory and high demand. Not high inventory and high demand like in the early 2000s.
Plus, earlier projections by top industry experts are already being revised to higher than originally anticipated. That means more likely than not, we could see another year of above-average price appreciation.
HOW WILL RISING INFLATION IMPACT THE HOUSING MARKET?
But inflation isn’t new. And if we look all the way back to 1970, we actually see one big takeaway: homeownership is historically a great hedge against it.
For example, as rental prices continue to rise nationwide, locking in mortgage payments can keep your largest monthly cost the same. remain the same.
Another big takeaway: home price appreciation has outperformed inflation for decades.
So, if you have clients worried about how today’s inflation may affect the housing market, tell them this: at the very least, data shows that historically real estate gas outperformed inflation.
There are many benefits to homeownership. But the biggest one you need to discuss with your clients right now is that it’s consistently been voted the best long-term investment a person can make in their life.
And waiting for the market to cool off or prices to go down means only one thing: paying more for the exact same house. Especially as experts project mortgage rates will continue to rise.
The best advice you can give any clients who are hesitant to hop into this hot market is this: you can wait, but it will probably cost you.