Some are calling it the property market curveball that no one saw coming: war in Ukraine, 40-year-high inflation and the Federal Reserve pushing interest rates north to stop an overheating economy.
No matter how you look at it, the property market is beginning to swing back from its record-breaking growth for houses, condos and apartments.
While not everyone’s property increased in value by the national average of 20% plus in the past 12 months, and 35% in the past two years, many owners have gained handsomely.
And their investment makes an interesting comparison with the stocks as the market flirts with Bear territory right now.
The supply of homes on the market remains tight, and the strong economy and low unemployment rate of 3.6% will keep many buyers in the market.
Below, I’ve listed a few quick observations about the market. I hope you find them useful, especially if you’re considering selling or buying soon.
I’d be more than happy to discuss these with you directly and how as your agent, I might be able to achieve a great price for your home.
Turbo-boost
While the market might be cooling, let’s not forget where we’ve come from. Value growth in property has been spectacular in most neighborhoods. Economic programs related to the pandemic gave real estate a shot in the arm, coupled with a shortage of homes for sale as sellers withdrew from the market.
Mortgage payments
These are heading higher as the Fed pushes up the cash rate to dampen inflation caused by labor shortages, supply chain disruptions and the rising costs of fuel and food. Rates are predicted to top 5.5% for a 30-year variable loan later this year. This will take a percentage of folks out of the market in the short term.
More for sale
Economists at Realtor.com predict the number of homes for sale will increase as we begin to revert to more normal market behavior. This change in the supply-and-demand dynamic will present some good buying opportunities.
Don’t second-guess
If you want to upgrade or downsize, don’t fall into the trap of trying to second-guess the market. Those who think they can pick the moment to make money often delay for no benefit, or lose out down the track. Make your move when it suits you.