1 minute read
Home Sweet Home
from CB Living
Hey Chicken Little, The Sky is NOT Falling…. …The winds have just changed direction.
With the recent increase in inventory and cooldown in buyer demand, we are returning to a more sustainable, balanced market. The two years leading up to May 2022, were a wild frenzy with homes selling in minutes, hours or days well over the asking price. That real estate Bull Market lasted so long that we became lulled into thinking this was the “New Normal”. Any real estate professional that has been in the industry since 2008 or longer, understands that real estate is a rollercoaster ride with peaks, valleys, straight-aways and little bumps along the way. While this slowdown has been uncomfortable, it is nowhere near the mortgage meltdown that shocked the market in 20072008. During the 2007-2012 housing cycle the US suffered a net of 8 million job losses, subprime loans (pick-a-pay, Neg AM and Interest Only) were the norm, homeowners had very little equity, mortgage delinquencies and foreclosures we soaring.
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While the path ahead is uncertain and the forecasts range from doom and gloom to a mild hiccup let’s look at what we know for sure:
• In the second quarter of 2022, the average level of equity for homeowners with mortgages hit nearly $300,000, according to CoreLogic. Nov 28, 2022.
• Foreclosure Market Report, which shows there were a total of 30,677 (only 0.6%) U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions. Dec. 8 2022
•According to Trading Economics, the 30 Year Mortgage Rate in the United States averaged 7.75 percent from 1971 until 2023, reaching an all-time high of 18.63 percent in October of 1981 and a record low of 2.65 percent in January of 2021
Homeowners have A LOT of equity in their homes, a glut of foreclosures IS NOT going to hit the market and interest rates are still below the 30 year average. Embracing the return to a balanced market may take buyers and sellers a few more months. Properties that show in prime condition and are priced appropriately will sell. They may just take weeks or months, not minutes or hours.
