Listen to Episode 12: Doom & Gloom
We are BACK from VACATION! Cassie is back from the Oregon coast, but vacation is never really vacation when you are a real estate (IYKYK)! But how much can you complain when you are working from the beach!
In this episode we are going to dive into the current market. We don’t usually talk about this because it is ever changing, but a lot of people have felt the shift in the market so we are going to chat about what that looks like and where it is going because there is a lot of speculation with a lot of DOOM and GLOOM!
Real estate agents are scared as they get flashbacks to the housing crash of ’08.
However, let’s talk about the difference. We couple the last recession with the housing crash and they did play into each other, but the recession is when the GDP is negative or decreasing 2 quarters in a row. So we are technically in a recession right now as a country. The housing crisis, last time, was on top of that recession.
So the difference as to why we saw the housing crash and depreciation of housing prices then was due to lending practices at that point in time. They were handing out loans without verifying so people weren’t able to afford their homes. Or there were loans where people were only getting approved based on the interest payments. Those loan practices went away in 2009/2010 so people buying homes now are able to afford them. On top of that there were layoffs and all of this drove housing prices down.
We are also backlogged on homes because after the recession builders pulled back. This last decade we only built a fifth of the amount of homes that we did the previous seven decades. So we have a built up need for new homes so we still have a huge amount of people that want homes (plus we don’t have those bad lending practices).
The market is CORRECTING still. Price reductions are just starting now because people are panicking. Even in the last recession (’08/ ’09) our market in Spokane pricing of homes only went down 13-15%. Well we are up 20% year over year for the last 3 years. So even if we go down 20% we are only going back a year ago pricing. And even the pricing a year ago was still high.
It is still a seller’s market they just missed the top bit of the bubble.
People are still looking to buy especially with the burnout of rental situations. Our office has still been very swamped since the “slow down”. We are seeing interest rates increase which reduces inflation, but buyer’s are feeling that pressure and wanting to take advantage now of buying a house.
Other things we are seeing:
Some companies have programs that if it is a home in a place that needs growth they will have lower interest rates. A lot of places in Cheney is a part of that which is cool. But I am seeing a lot of companies go away with these programs as rates keep increasing. Lenders are limited. They used to be able to do a lot more and now they are limited due to a lot of the laws that were created.
I try to make sure to check in if it is rate locked with the lenders and try to get it locked. Some won’t lock a FHA rate until after appraisal and that can really affect your interest rate in this market. Things to talk about with the buyers. Predictions say they will hit 7% by the end of the year which feels bad because housing prices are so high!
Historically real estate has appreciated during recessions
Only a couple times have they gone down during a recession. So if you can afford it, now is a good time to get in to your dream home!
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ABOUT US -🎙 Agents Unfiltered is a podcast with the goal of connecting and building community between realtors nationwide. Get ready for some relatable and relevant information about “The Do’s, the Don’ts & the What The Fuck’s of Real Estate.”