This week, I came across a video by Barbara Corcoran, known for her appearance on Shark Tank. Though a renowned investor, a significant portion of her portfolio is in real estate. Her core message was around the unlikelihood of seeing 3% interest rates again, although a slight retraction from current rates is anticipated. “Once rates hit anything with a five at the start, everyone’s going to rush back into the market, causing a scarcity of available houses and driving prices up by another 10 or 15%. Now is the prime time to buy a home while fear prevails,” she emphasized. Amidst a backdrop of ongoing wars, escalating interest rates, and looming recession fears, home buying may seem a risky endeavor. However, for those who’ve been sidelined from the housing market in recent years, waiting for either interest rates or prices to dip, this could be the opportunity. Not due to a drop in interest rates or housing prices, but rather, the decreased competition despite the historically low housing inventory. Unlike previous years, finding a property that meets your needs could lead to a purchase without paying above the listing price. Although a reduction in interest rates is expected within the next 12 to 18 months, a substantial increase in inventory isn’t foreseen. Unfortunately, no significant trigger for such a change is on the horizon. Hence, housing prices are poised to keep rising, and any notable dip in rates will reignite fierce competition, echoing the multiple offer scenarios of 2020/2021. To illustrate, housing prices have seen a 5 to 7% appreciation year-to-date, varying by the source. The market bears a significant latent demand for single-family homes. Reflect on the diverse groups who’ve missed out on home buying over the last three years: 1) Numerous families who aimed to move during the pandemic but couldn’t secure a home amidst the frenzy, 2) potential first-time buyers now stuck in escalating rental situations, 3) growing families, 4) those relocating to Atlanta, 5) individuals needing to move for work, be it remote or returning to the office. The situation resembles a tautly stretched rubber band. A repeat of the 2008/2009 financial crisis is unlikely. During that period, about 3.5 to 4 million homes were on sale with scant buyers due to job losses. Now, with an estimated less than 1 million homes available (75% less) amidst a strong labor market, we’re seeing pure supply and demand at play. The crux is, waiting for a price drop to make a move might be a flawed strategy. The delay cost is tangible as housing prices are set to climb until a surge in construction occurs. For builders, the hurdle to ramping up production lies in securing affordable land, contending with rising construction material costs, and navigating labor shortages. Interest rates are a lesser concern as any loan secured now can be refinanced once rates start to descend. Many economists predict a dip in long-term mortgage rates coming next year. Should this coincide with the spring purchasing season, it could potentially increase demand. If buying soon is in your plans, it’s wise to maintain a diligent search over the upcoming six months. This approach will prime you to seize an opportunity should the right house come along. At present, securing the ideal property poses the greatest challenge, so stay alert. Don’t forget to reach out to us for Certification before diving into your home buying adventure!