The world has been going through some pretty unique circumstances over the last several years. From the Covid pandemic sweeping the globe to a volatile stock market fluctuating week to week, there has been no shortage of challenges faced by millions of people as we all strive to navigate these unique times. Planning for the future can be tough when you’re living through unpredictable periods, but it certainly isn’t impossible. One of the best ways to get ready for days to come and feel at ease about your current situation is by becoming well-informed on the topics that concern you.
In the real estate industry, many of the most common questions regard the current state of the market and predictions about its future. Buyers want to ensure they are purchasing quality properties at fair prices that will appreciate over time, while sellers want to ensure they are listing their homes at an optimal time to receive top dollar. With so much uncertainty in the world right now, many buyers and sellers are left with many questions about how to successfully enter the housing market.
To help you better understand the real estate market and how it has been performing in recent years, our team at The Dougherty Group has answered the most Googled real estate questions of 2022.
Is the housing market going to crash?
The real estate industry may be a bit unhinged at the moment, but there is no reason to believe the housing market is going to crash. What we’ve seen in 2022 is an environment where the demand for homes is exceeding the supply, which is causing such a high level of competition for purchasing a home. When there are more interested potential buyers than there are homes available for purchase, it’s very common for bidding wars to erupt and prices to skyrocket. This does not, however, indicate a crash in the future. The substantial equity homeowners have in their properties hasn’t changed, and with the values of homes being on the rise, many properties have proven to be savvy long-term investment vehicles.
When will the housing market crash?
While we do not anticipate the housing market crashing, it’s important to never say never. Although it is unlikely, there are certain circumstances that could lead to a potential crash if patterns continue going in this direction. Due to housing prices being on the rise, there has been a lot of speculation in recent years from people who are purchasing properties with the intention to flip and sell them for a quick profit or hold onto them for some time while they wait for the value to rise.
More and more investors have been getting involved with real estate than in previous years, which could lead to problems down the line due to buying up a lot of the inventory and causing prices in the neighborhood to surge further. Conditions such as these can lead to a real estate bubble; however, the housing market crash that happened in 2008 will likely never happen again. The factors that caused the housing market crash, most notably the unsavory financing, have been stopped by new housing laws.
Why is the housing market so high right now?
The primary reason that prices in the housing market are so high right now is that the demand is greater than the supply. As is the case in every industry, prices are determined by how strong of interest there is in making a purchase. More people are looking to buy than sell, which is reflected in the housing prices as sellers take advantage of the real estate climate to earn high profits on their listings. The millennial generation, the largest generation in the country, is also at the age when they begin to buy their first homes, which could explain the increasing demand for homes. There hasn’t been as much new housing development over the last decade as in previous decades, so more buyers are competing for a relatively similar amount of homes.
Is the housing market slowing down?
The housing market has yet to slow down. However, there are some signs that things will mellow out in the future. Mortgage rates have been going up in recent times, which typically leads fewer people to want to buy since it makes purchasing a home more expensive. If mortgage rates continue in this direction, the demand to buy property will likely mellow out.
When will the housing market get better?
It's difficult to necessarily determine when the housing market will get better because what constitutes a good housing market varies based on personal opinions. Homeowners are currently benefiting from high home values that show signs of appreciation, which is a great scenario for them. For buyers, however, this challenging housing climate may get calmer if interest rates continue to be raised, causing less competition. This also makes purchasing more expensive if it is being done through a loan, but interest rates are still historically low. In regions that are building more residential properties to accommodate the demand, the real estate market will likely balance out.
While the real estate market may be challenging to navigate in neighborhoods across the country, buyers and sellers can still succeed in this competitive climate. Although it may be a difficult market, it does not indicate a crash in the future and will improve over time. By learning everything you can about the local housing market in your neighborhood, you’ll be able to determine the optimal time to enter the housing market.
If you’re interested in buying or selling a home in Morris County and would like assistance from an expert, contact The Dougherty Group today. As experienced professionals who have handled ample transactions over the years in highly desirable neighborhoods, such as Morristown and Morris Plains, their skilled team knows how to successfully close deals in even the most competitive environments. By providing insight into the housing market and guidance throughout the process, their team can help you find the property of your dreams or earn top dollar on your home in no time.
