After working as a real estate licensed salesperson in the State of New Year for more than 15 years, I’ve come to the conclusion that this is arguably the only unchanging truth about real estate. Near-historically low interest rates and previously unheard-of effects on the global economy have been plaguing us for a while now. Of all the reasons, though, this terrible epidemic may be the one that has had the most overall impact.
Although no one can predict the future with certainty, I believe it would be helpful to think about and offer my best estimate of house pricing in the intermediate term (This time is often believed to be from around two and a half years to approximately five to seven years). In light of that, I’ll try to briefly explore, investigate, assess, and debate 5 of my guesses/predictions in this essay.
1. Interest rates/mortgage rates: According to basic economics, historical tendencies, etc., interest rates won’t stay at their current, record-low levels for very long.It has already been around longer than usual! We have already begun to see inflationary effects brought on by recent economic measures, as well as artificially low interest rates that persisted for an extended period of time. I anticipate that, somewhere in the upcoming year or two (barring any unanticipated stress), they will gradually increase and that the current record-breaking rate of home price increases will either level out, expand at a much slower rate, or perhaps partly return to earth. This adjustment directly affects mortgage rates, and lower rates make more costly homes more accessible.
2. From a market for sellers to: Since the housing market has historically been cyclical, we are presently seeing a protracted sellers’ market where demand is outpacing supply. It would be reasonable to anticipate that the tendency would shift from this strategy to one that is, first, more balanced and, maybe, even, at some point, to a buyers market!
3. Supply and Demand: Real estate is dependent on the laws of supply and demand, much like the majority of economic goods! This means that when demand increases, prices rise, and as it decreases, prices fall. Most people anticipate a slow return to the cyclical circumstances they frequently saw and experienced in the past.
4. The effects of inflation: Homes have historically been regarded as one of the strongest hedges against inflation! But wouldn’t it make logical for them to gradually become more level, etc., given the recent sharp hikes that have greatly accelerated the rate of inflation? Although many foresee inflation in the very near future, we will likely revert to more stable levels in the middle term.
5. All real estate is local: Predicting the performance of different areas, neighborhoods, and even cities can be difficult since real estate is frequently local in nature.
Although I believe that they are most likely to happen, keep in mind that they are only best guesses and that nobody has a crystal ball, etc. Move forward with caution, awareness, and alignment of your needs, priorities, perceptions, etc., with your level of personal comfort!