With the uncertainty of the economy plaguing residents in every part of the country, a common concern is if the real estate market is on the docket for a collapse. Real estate professionals are always on the lookout for today’s important trends that dictate tomorrow’s real estate market.
Home buying has been difficult for Americans recently, and many believe that this is a sign that a real estate market crash is coming. As home prices continue to rise and supply and demand trend in harmful directions, is it safe to assume that a real estate market crash is on its way?
What the Experts Are Saying
Despite the difficulties of the first-time home buying experience, experts are all in agreement that the housing market is booming. Higher house prices and double-digit appreciation are factors that experts point to that show the increased demand for homes and the signs that the housing bubble might not be a bubble at all.
The past isn’t always representative of the future, but some chief economists agree that homeowners shouldn’t expect the market to sizzle off anytime soon. Demand for homes is exceptionally high, and there are bidding wars daily for properties. Other experts feel that price growth will continue, but it shouldn’t be at the level experienced in 2020 and 2021. Either way, there is no expectation that there will be a housing correction anytime soon, especially not in 2022.
What About 2023?
While a real estate market crash is highly unlikely for 2022, many wonder if these rising mortgage rates and home values will continue to increase into the next year? Fannie Mae predicts that it won’t be until 2023 that rising home prices will return to the pre-pandemic rate of 5.5%. A slowing of growth in 2023 could actually be a boon to the real estate market as it could help reintroduce a ton of first-time homebuyers who have been priced out of the market.
Does this mean a market crash is likely in 2023? A few differences in today’s market versus the market during the last housing crisis show that a crash is unlikely. We are dealing with entirely different supply chain issues regarding homes. When the previous housing bubble burst, supply heavily outweighed demand. This time around, the opposite is true, and it is believed that the high demand will continue to stimulate the market as the higher interest rates return to normal.
In addition, there were many more risky mortgages handed out to individuals who couldn’t afford them. Nowadays, plenty of cash buyers and stricter loan practices lower the risk of approving loans for those unable to maintain a mortgage.
What Does This Mean for You?
While it’s unlikely that we will see a major real estate market crash in the near future, further out, things are a bit more complicated. For one, not many people are keen on the pandemic’s impacts on the economy. As great as experts are, you can never be sure of the economy’s direction, as recent history has shown us.
That being said, first-time homebuyers are still in a great spot, and those selling homes are in a highly advantageous spot. As much competition as there is, there are still locations where you can find great deals, and moving to further areas has become much easier due to the implementation of remote work and easier means of travel.
Get the Best Deal on Your New Home With Joseph Bograd Real Estate
Navigating the intricacies of the market can be difficult, especially for first-time homebuyers. Make the process easier on you by coordinating with Joseph Bograd Real Estate in Bucks County, PA. Whether you’re looking for a rental property in Philadelphia or new construction in Huntington Valley, PA, we’ve got you covered!
