Ok. I’m gonna take a break from the goofy videos and we’re gonna get serious about some concerns people are having about East Idaho Real Estate.
Clients have been feeling like been 2019 is the year that the next housing crisis will occur and that we are in a very obvious shift and that bring change. When change occurs, it starts to create doubt and puts us in an scary emotional state. Let’s take a look at the market and the real facts of what’s really going on nationally. Not what the guy you sat next to at the basketball game suspects.
A big question in everyone’s mind is: Does the fact that we are seeing a lot of listing price adjustments mean we are headed into another housing crash? NO…We’ve been in a market where home prices have appreciated up to 12% per year and that increase has been mostly due to lack of inventory. With the number of new builds going up, that inventory problem should be leveling out and bringing prices more into line. When this happens, people start to get nervous. What people aren’t understanding….That doesn’t mean the homes are depreciating in value, it’s more like they will just appreciate at a lower rate more like 5 to 6% per year.
Now, most people are afraid of the word “Recession”. We have to have it, our economy has been really solid and at some point, it has to level out. It’s like the guns and butter lesson we all learned in high school economics. So let’s define it. Recession means an economic slowdown. It doesn’t mean another housing CRASH. The actual definition of a recession is an economic slowdown for two straight quarters.
What is going to happen to home prices?
A study was just done that looked at the projections going into next year from 100 of the leading housing analysts. Of those 100, 94% say house is going to continue to appreciate, 2% say it will maintain the same and 4% say we’re going to depreciate slightly; SLIGHTLY bing the key word. It will still be over the historical average. If you take that same study out 5 year….there is no one calling for depreciation. Not one! That’s a good sign!
So what about the rise of interest rates, couldn’t that impact the number of housing transactions? We need to take a look at where interest rates were in the 80’s and 90’s, rates were up as high as 8 to 10%. Now, you may not be getting as good of a rate as your older brother did last year, but you’ll definitely be getting a better rate than your oldest brother got 10 years ago, your parents did 20 years ago and your grandparents did 30 years ago. And the feds have come out and said that it’s not certain that the rates will dramatically continue to climb. The National Associations of Realtors, The Mortgage Bankers Association and Fannie Mac all project that there will be more real estate transactions in 2019 than there were in 2017. And 2017 was a great year.
So guys, now is not a time to panic. But it is a time to really focus on pricing your East Idaho Real Estate correctly ! There was a time when you could price your home at $280k when your home is really only valued at $220. Those days are GONE. It’s just not gonna happen in today’s market. But that’s a good thing. Who wants their house to sit on the market for 6 months, only to then readjust it to the price it should have been originally and then have it sell quickly. Think about what those 6 months of mortgage and utilities payments cost you. That comes right off the final sales price. More than likely you didn’t put any more money in your pocket. You just waited longer to get your money.
If you have any questions about where your home should be priced at or if you in the market to make a move….call me at the number below.
Then get packin’, cause you’re movin!
***Statistics and Information from Steve Harney, KCM Founder & Chief Content Creator