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Connie's Housing Market Update

August 16, 2023

There seems to be a lot of positives for the real estate market right now.  House price appreciation has gained momentum, employment has retraced towards historical lows, millennials are approaching their prime earning years, and mortgage rate volatility is stabilizing. Yet, the impact of inflation, often portrayed by the media as a Godzilla-like monster that will flatten everything in its path, is obstructing a clear view of these changing trends for everyone.

I think we all know the story on why inflation has spiked up. We shut down manufacturing and disrupted global supply lines while simultaneously stimulating the economy. Supply and demand became epically mismatched. Add a major regional war in Europe. And voilà, a perfect inflation storm that we are fighting with the FED’s only tool – interest rate raises to cool our “spendy” habits. 

Unfortunately, interest rate hikes are such a blunt instrument that many economists think that by the time these hikes have been seen to do their job we will be in a recession. If some gloomier forecasts prove accurate, we could enter a phase of what's often referred to as a "rolling recession," characterized by certain market sectors facing decline while others maintain their regular performance. This entails a situation where certain segments of the economy thrive even as others struggle. For instance, the cell phone industry might be unaffected and see robust sales, while the mortgage lending sector experiences a considerable downturn, effectively undergoing a recessionary period.

The way the media covers home sales, property prices, and various market indicators has driven both buyers and sellers into a precarious situation of attempting to predict market movements - essentially, trying to time the market. 80 percent of Americans hold the belief that at the current moment, real estate purchases are unfavorable.

My personal belief is that the media has got it wrong and they don’t fundamentally understand the Real Estate industry. The bottom line: it is always the right time to buy the right piece of real estate. Those who state or think “It is not a good time to buy” need to look at real estate historical data in order to understand how that notion is uninformed. The misconception about pricing and mortgage trends is cheating homebuyers out of long-term wealth opportunities. 

American consumers are exhibiting an inclination to overspend on cars, which have now taken the lead on the inflation index with a notable 16.9 percent surge in insurance expenses, a 12.7 percent increase in maintenance costs, and an 11.6 percent rise in monthly payments — while trying to cut corners on purchasing a home. Consumers are short changing themselves by  putting money into depreciating items like cars and waiting to spend on appreciating items like a home.

I can not predict the future but the past has shown that real estate is always a good investment. 

Just call, text, email or dm for a further chat or to start finding the right real estate for you!

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