Since, we have experienced, perhaps, one of the most prolonged, steep price increases, in housing prices, many seem to wonder, will this continue, and, if so, for how long, and then, what! Since, historically, real estate prices fluctuate, and, often, it is challenging, to accurately, predict, trends, and, certainly, there is no such thing, as a crystal - ball, when it comes to making these predictions, it is wise to try to avoid any attempt to market - time! After, over 15 years, as a Real Estate Licensed Salesperson, in the State of New York, I believe, and recognize, there are, at least, four possible pricing trends and possibilities. With, that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 4 of these, related to the residential housing market.
1. Will it continue rising, at, or near, the present rate?
Most doubt real estate prices, will, continue rising, at this pace, for a prolonged period, into the future! Many factors created, somewhat of, a perfect storm, related to what we have witnessed, for about a year! The emotional stresses, and concerns, emulating from this horrific pandemic, a desire to make certain changes in lifestyle, and a desire to avoid, delaying, as well as close to record - low, mortgage interest rates, have contributed, as well as, in certain, popular, geographic areas/ regions, Supply and Demand, issues, which, created a Sellers Market, have accelerated this process, and results!
2. Continue rising, but, at a slower, more gradual pace?
Might pricing continue rising, but, more gradually? At some point (and many, believe, we have already begun, witnessing, some evidence), many potential, qualified buyers, will get discouraged, and, if this is combined with, more homeowners, trying to cash - in, and sell, the pace, will certainly slow!
3. Will prices level - off?
How far, will the potential cooling, of this market, go? Will we see, prices, level - off, and for a period (adjustment period), make pricing, more stable, and even? When interest rates, eventually, increase, as it seems will occur, probably, in 2022, what will that do to prices, and perceived costs, because, higher rates mean increased monthly payments, etc?
4. Will prices, decrease, and, if so, why, and for how long?
Since, prices escalated so rapidly, and so much, could they decrease, at some point? Although, historically, home prices rise, with inflation, this increase was not significantly, related to inflation! While it is possible, we will see a decrease, most believe, it will probably, level - off, and become, more like, we witnessed, historically, so any period of falling prices, will, most likely, be somewhat short!
Since, for most, their house represents their single - largest, individual financial asset, doesn't it make sense, for potential homeowners/ buyers, become better - educated consumers? Will you pay more attention to the possibilities and realities?