What a crazy market!! Here are four interesting articles that will help you to understand why real estate is so hot, and what you can expect in the future.
1. Home Price Decline Interactive Chart
While many people think that real estate prices are going to fall, this article and interactive chart show that while there may be some areas that could experience falling prices, most of the United States will not see price drops.
2. Pricey Coastal Markets Seeing Cool Down
There are early signs that the real estate frenzy we have experienced for the last two years may be slowing a bit. But don’t expect a screeching halt or prices to fall from the sky. Demand is still high and the real estate market changes slowly.
This article states: “We’re also seeing a cooldown in demand for vacation homes, with mortgage-rate locks for second homes up 13% from pre-pandemic levels in March–the lowest level in nearly two years and down significantly from the 88% increase a year
Earlier.” I think this is misleading – there would only be a cooldown if mortgage rate locks went DOWN, but they are continuing to increase.
In summary, the freight train of the real estate market could not and should not continue as it has been. These early signs of slow down may be just what our market needs to being more balance to the industry.
3. The state of relationships, marriages, and living alone in the US
I was recently directed to this article by Lon Welsh, the founder of Your Castle Real Estate. This article discusses how the population’s choices about relationships affects housing choices, and as a result pricing.
One of the reasons why rent and home prices are so high is that we have a nearly record number of one person households. That creates lots of demand for housing (rental and purchase). It’s a luxury to live by yourself. High housing costs might reverse this trend by forcing people to have roommates.
(hover over the pink line in the graph above to see the percentage of one-person households each year)
4. The Extraordinary Wealth Created by the Pandemic Housing Market
This New York Times article explains that, “Over the past two years, Americans who own their homes have gained more than $6 trillion in housing wealth.” It speaks to a gap that may be widened even further by the haves and have nots, and how equity from real estate is a great vehicle for other opportunities like college education and business ventures.