From the opportunity to take advantage of today’s low mortgage rates to changing homeowner needs, Americans have more motivation than ever to buy a home. According to the experts, buyers are making moves right now, creating an unseasonably strong housing market for this time of year.
As we wrap up the fall season and move into the winter months, here’s a look at what several industry leaders have to say about the continued momentum in the current real estate market, and what it means as we head into the early part of next year.
“This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low. The notable gain in October assures that total existing-home sales in 2021 will exceed 6 million, which will shape up to be the best performance in 15 years.”
“So far in November, purchase applications point to another strong month in sales. Still low rates and demographic demand support this strength, even as affordability and inventory headwinds remain.”
“The demand for housing in the United States has reached a fever pitch, a trend that opposes the norm of this time of the year when the market cools as the winter months set in.”
“Strong demographic demand will continue to act as the wind in the housing market’s sails.”
Boston condo buyers are actively in the market, and they’re competing for homes to purchase. With the momentum coming out of this fall, all signs point to the winter housing market picking up steam, making it much busier than in a more typical year. And as we’ve seen in so many ways, 2020 and 2021 were anything but typical in real estate. It looks like 2022 may be joining that list before we know it.
If you think the housing market will slow down this winter, think again. Whether you’re thinking of buying a home, selling your house, or both – let’s connect to determine if this winter is your best time to make a move too.
As you know, I don’t really care all that much about the state of the housing market, one way or another, because I’m more focused on individuals, and helping people find a safe, comfortable place to live in a nice neighborhood, world economy be damned.
Still, we don’t live in a vacuum, now, do we?
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Here are a couple of snippets from a great interview with W. Scott Simon, who works at PIMCO, the big bond company. I think what he says is spot on.
What’s going on with the housing market?
About a year ago, we forecast double-digit increases in home prices and a really robust housing market through the end of 2005, followed by a gradual slowdown in 2006 to about five percent price appreciation. And that is the path that the housing market has taken.
What’s going on? What’s the problem?
Home prices are increasing more slowly, the volume of sales is down at least 10 percent, the number of homes on the market is starting to really skyrocket, the number of days homes are on the market is increasing, affordability has gotten much worse, and interest rates are up. When you add all of these things up, overall conditions in the housing market are fairly negative, so we just think the market is slowing under its own weight.
That’s none too cheery. Is Armaggedon ahead?
We’ve looked at housing bubbles over the last couple of hundred years and one thing that was very consistent and I think was really clear is that bubbles only burst when there is a lot of unemployment. If you just look at the last 25 years, there are two examples of housing bubbles that burst. In both cases, the banks ended up owning property that they wanted to get out of and ended up selling at any bid. Thats how housing prices go down. Otherwise, people just live in their houses and the number of home sales really goes down a lot, but prices dont have to collapse because people have to live somewhere.
Hmmm. Reminds me of the late 1980s, when the federal government came into Massachusetts and took ownership of all those lousy condo conversions.
Where do we stand now?
30-year mortgage rates are now at the highest level in three years and the rate on adjustable-rate mortgages, which are much more dependent on the Fed, have gone up significantly. So the housing market has been squeezed on the affordability side and has lost fuel in its tank from the mortgage side, and the two add up to a gradual decline in activity.
Regional markets have seen a gradual erosion of the velocity of price increases, a gradual erosion of sales volumes, and a gradual increase in the volume of supply. That’s pretty consistent. Some regions are slowing moderately and some are slowing a lot, but overall, the numbers suggest a gradual slowdown.
Contact me to set up an appointment to start your Boston condo buying process.
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Updated: January 2018