Thinking of Waiting Out This Crazy Market? Let’s talk about why that’s not a good idea!
Dated: June 4 2021
Whether you are thinking about buying your first home or moving to a bigger home, much of what you see and hear tells you our real estate market is crazy. At first glance, it might look like it’s a good idea to wait the market out. If you are thinking it’s a good idea to “wait until things calm down”, think again.
First, Let’s look at what is causing the “crazy” part. Most of what we are seeing is a simple supply and demand issue. Between 2010 and 2019 new housing starts, were half of what they were the decade prior. We simply did not build enough houses for the growth in demand today. Predictions in population growth indicated there would be a drop in demand instead of an increase. While there was pent up demand caused by Covid, it is not the real story. We can Call this issue “the great generational clash!” Millennials make up 30% of the market and Baby-Boomers make up another 30% of the market. Baby-Boomers are retiring later, staying in their houses longer, and living longer. Many Boomers are choosing to “retire in place”, meaning they have no plans of moving. Millennials are entering the market at an unprecedented rate and a little earlier than predicted. Lastly, many of us realized during the last year of staying at home, our houses no longer meet our needs. The result of all this is half of the supply and twice the demand.
Low interest rates and affordability are driving much of that demand. Buying is more affordable in our area than renting. Home equity is increasing by an average of $23,000 per year per household. Real Estate has always been a good investment and with increasing equity it is a great investment.
Now let’s put all of that together and talk about the cost of waiting. Analysts believe that it will take at least six years for supply to catch up with demand. Meanwhile we should start seeing an increase in interest rates over the next two years. While we believe the increases in housing prices will flatten somewhat over the course of the next six years, It is not expected to decrease. In six years, that same house will cost much more, with a higher interest rate, and will probably be purchased in a seller’s market. Waiting could cost you some big bucks!
Let’s connect and talk about what is important to you and how we can work together to reach your life and home goals.
I am a second generation, native Houstonian. My husband and I are proud to be the parents of 5 grown children, in a blended family, and grandparents to 8 amazing grandchildren. I am a currently a memb....