Market Shift Jitters
You’re not alone if the current market shift is making you anxious. The dipping stock market plus rising inflation and interest rates are understandably causing lots of jitters among today’s buyers and sellers. In these uncertain times it’s good to remember that the market is always in flux. If you zoom in and look at month over month changes in housing prices, you’ll see prices fluctuating quite a bit. Of course, this type of chart is a lagging indicator. Yes, we know what happened but it’s really hard to time a home sale or purchase to take advantage of month over month fluctuations i.e. sell at the top and buy at the bottom. Plus, the timing of buying and selling is more tuned to how it fits into our daily lives - school, work, relocating, etc. When you zoom out and look at values over 10 years or more, that zig zagging line becomes a straighter diagonal line rising up and to the right.
Housing for most people is a fulfillment of the existential need for HOME combined with the benefits of a wealth building, long-term investment. So the real question is this: how is the current market affecting what you specifically want to do?
If you’re selling, you’re still selling into a very strong market with low inventory and historically high prices. It may not get much better than this for sellers.
If you’re buying, the higher rates make things a little tougher but the bright side is that the same high rates have diminished the number of buyers out there - your competition. My most recent buyers to go under contract still had to dig deep and be super-prepared to beat out 4 other offers on the 3rd day on market, but that’s way better than having to beat 10 or 15 other offers.
At the moment the data shows the current DC Metro market about midway between the Spring 2020 and 2021 markets. The rising interest rates are already reducing buyer demand and will eventually dampen soaring prices but, on the whole, this is still a pretty good market. When we zoom out in 5 or 10 years I expect we’ll still see a chart that goes up and to the right.
