Two common questions I get: When will the real estate market drop in price, and should I wait for the market to drop before I buy? So this is my perspective from both a real estate agent and investor. Feel free to add me on Snapchat/Instagram: GPStephan
The way I see it:
People have too much equity in their homes to let them go into foreclosure. Banks are strict about who they’re lending to, and want people with higher down payments and strong income. In order to qualify, a buyer must pass a rigorous approval process reviewing their financials, income, credit score and history, assets, and debt. They do not let just anyone buy a home now. I don’t see anything that leads me to think we’re in a bubble.
In addition to this, we have low interest rates which are holding prices fairly steady. If this climb too fast, yes, it could have a short term impact on pricing – but there’s no way they’d raise interest rates that quickly to disrupt housing prices. It’ll be done slow and steady over many, many years.
Realistically, we’ll see many more homes in construction coming on that market. This will lead to an over supply of homes which means buyers will have more leverage and more to chose from. This won’t cause housing to crash, but it could take longer for a seller to sell a house because they’re facing more competition.
This, combined with slowly rising interest rates, I believe that housing is safe and won’t see any type of large price drop. Realistically, there won’t be any price drop, but we won’t be seeing huge appreciation like we were over the last 7 years – which is not sustainable to begin with. I think we’ll enter a period where normal, slow appreciation is the norm as more homes come on the market and interest rates slowly get higher. No reason to panic and nothing out of the ordinary.
*Just my pure opinion, of course. Do your own research and come to your own conclusions. This is only from my perspective.
Thanks so much for watching!
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