Here we go again with another round of media frenzy about the real estate market. Things were steady for a long time with low interest rates, low inventory and high demand which kept the market strong pricewise. Buyers adapted along the way, making adjustments that enabled them to buy in that dynamic market. Sellers spent much of their time pondering when to enter the market and wondering if they could accomplish their replacement property objectives without being homeless. In the past couple of months, interest rates have crept up, but the demand is still good. Prices are dropping a bit, but they aren’t crashing like they did in the last recession that began in the fall of 2008. Sellers that were timing the market are coming on the market to avoid missing out on the price surge, and they seem to be pricing their properties at a market price rather than the severe overreach pricing that so many tried a short time ago. Now we have the media starting to stir things up. There are stories about the current market and how it will be changing. Many media sectors are talking about another recession. They aren’t very speculative about it; they seem to be very sure about it. As they talk about it, they drive the point as it pertains to real estate. Along the way they talk about higher interest rates and the need to raise rates to combat inflation, and how everything rolled together is going to initiate a recession. Some go on to estimate the length of time that we will be in a recession, and it seems like each and every comment is steeped in negativity. Some things that get overlooked include the move by investors to move their money from stocks to real estate. This is one of those facets of the financial world that seem to ebb and flow over the years on a regular basis as investors move from one type of investment to the other, according to their respective changing markets. Stocks have been taking a hit lately, but real estate is holding its own. Investors looking at income property see the rental rates holding their own right now close to or at all-time highs. Tenants’ ability to replace their rental by purchasing is getting compromised a bit with higher interest rates, but the rates are still very reasonable in the big scope of things resulting in a rental and sales market that interact and offset one another nicely. Real estate is again in the bullseye of the media. They are bringing in pundits that talk about finances, real estate, inflation, investors, and more. We find it interesting that there is so much push to create a negative image while buyers are actively looking to buy. Most buyers now are either cash or getting a loan with the understanding that they will refinance in the near future as they optimistically believe the rates will go back down a couple of years. This mindset is not unlike driving on a vacation while gas is $5-7 a gallon because you want to. They want to own a home and will pay a little more for it temporarily, so they don’t lose too much time from their life plan. The long recession that began in 2008 initiated a period of time when many people had to put their life plan on hold. Significant purchases, vacations, and family gatherings were all delayed. Things got back to better than normal for a while then the COVID-19 virus commandeered their life plans and things were once again put on hold. What we see now is a significant push back by people that are tired of delaying their life. Incomes are up as are expenses. We can get past this period of uncertainty and forge ahead happy and strong despite what the media is propagandizing. Establish your priorities, make your goals, create the vision and act. You will be amazed how easily you can buy or sell with a good experience despite what the naysayers are saying will happen to you. What is important is that you achieve your real estate goals and enjoy the fruits of your planning and action. Once again, “These are the good old days!” When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. dpwtigers@hotmail.com
