As we continue to see swings in global economic and financial markets, real estate continues to be an exciting arena to keep an eye on for both investors and prospective purchasers. The significant changes that were witnessed throughout the COVID-19 pandemic have now given way to a new series of shake ups in demand, supply, mortgage rates, and purchasing power for those looking to buy property. Let’s take a look at this recent news and how Mortgage Maestro Group can help you take advantage of new opportunities.
SHAKE-UP
As we discussed on our previous blog, it can be tempting to try and draw direct correlations between global economic markets and the housing market (regional or national). However, the lines connecting these two pillars of our economy often end up being blurrier than we might think. Recent reporting from the New York Post indicates that “Home valuations fell 0.1% in July compared to the previous month, according to a recent report published by online marketplace Zillow. The downtick marked the first drop in Zillow’s Home Value Index since 2012. The pandemic-era real estate boom has cooled considerably as two years of price increases and sky-high mortgage rates result in ‘diminished’ purchasing power for would-be buyers, according to the firm.” Along with this new data, The National Association of Realtors reported in August that “Existing-home sales decreased for the seventh straight month to a seasonally adjusted annual rate of 4.80 million.” There was initially some speculation that the housing market could remain on its strong upward trajectory despite recent federal rate hikes, but that optimism now seems mistaken.
2023
These changes tell us some important things about what to expect over the next 12 months. Zillow is now estimating that home value growth, now sitting at a red hot 16%, is expected to drop to around 3% by this time next year. This estimate has dropped significantly following new data reports in June and July. It is important to keep in mind that while these are broad national trends, regional real estate markets in certain areas have remained somewhat immune to this recent downturn. To get the best sense of where your particular market is heading, give us a call today and speak with one of our Mortgage Maestro Group experts.
OPPORTUNITY
During the period of high demand and low supply we just experienced, our team at Mortgage Maestro Group focused on ways to give buyers more leverage in a very competitive marketplace. Now that we are beginning to see a necessary correction of that cutthroat market, a new set of opportunities for purchasing has emerged. If we see demand continue to wane and value home growth drop below expectations, great deals can emerge. We expect leverage to slide away from sellers and back in favor of buyers as housing supplies increase and valuations decrease over the next 12 months. There are areas to take advantage of in the new market. If you are considering buying a new home, your first home, or investing in a rental property, we would be happy to hear from you to discuss these exciting new opportunities. Give us a call at 303-779-0591
