Sept 2022-Tides Are Changing
The question today is: What can cause a market to change from a seller’s market to a buyer’s market EVEN if we still have low inventory? Answer: Government intervention. Now, I am not here to get political... however, I recall the founder of our company, Gary Keller, discussing market shifts and the dynamics that surround them. What dynamics can we predicts and assess at any time in any given market? What dynamics will surprise us and are totally outside the realm of "the normal market tide?”
Predictable: Of course, we have the law of supply and demand, which assumes that if we have extremely low inventory, naturally, prices will rise and a seller’s market will prevail. Also, we can assume that as prices rise (and rise), some buyers will be relegated to the sidelines and unable to afford homeownership. We can also safely say that cyclical market dynamics such as these have been and always will be just that: cyclical. The tide rises and the tide falls.
(Somewhat) Unpredictable: Inflation reports that cause major disruption in the stock market which eventually makes its way into our local real estate market. And... Why? Of course, there are many factors. One factor: As the Fed raises the federal funds rate in an attempt to fight inflation, mortgage rates are often affected (whether directly or indirectly). Our market is experiencing an upward trend in mortgage rates, which restricts buyers’ purchase power and will likely lead to a multitude of changes in our local real estate market. We will get into some of those dynamics next month.
BUT! Don’t fear. We are staying on top if the market daily, and will remain your local specialist, even as we enter a time of changing tides in our market. No change is ALL bad (or ALL good, for that matter); it is all a matter of perspective and evaluation of your specific goals and needs. Let’s chat! I am happy to help you determine whether this market is the right market for you to make your move.
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