I think people are still uncertain about the housing market and are super cautious. What do you think? Need help with real estate? Visit coloradohomebuyerassist.com.
Well, Iris, of course you're correct when you point out how HUGE just 4% interest rate difference makes in a house pay't. I don't think most people are aware of that as "just a few %" doesn't SEEM like it'd be anything major -- but it is! Meaning, its impact on the P&I part of the whole house-pay't of course, since all else will remain the same (property tax, home ins, HOA if any, etc.). And a 3% mortgage rate (what is was just a few short years ago) vs. a 6-7% rate today is a very "eye-opening" example. However, for me 3% is still a tad high -- but I'd jump on 2.960% for sure! ;-) Seriously though, MANY buyers refused to buy during the "housing market feeding frenzy" of the outrageously high/overvalued/inflated house prices 2-3 years ago (the auto-market then was just as insane, BTW) because they could see the foolishness of that and refused to "enjoy" home-ownership while also experiencing being incredibly House Poor. And now those same "still waiting buyers" have no interest in "bailing out" those earlier buyers trying to cut their losses by buying their still overpriced/overvalued homes, especially when interest rates are ALSO still too high. Even if there were very good reasons for buying when they did -- they HAD to buy (had no choice) -- the fact remains they still bought HIGH. But real estate is much like the Stock Market: You buy low and sell high, yes? So the "bad numbers" (underwater) are the same for those who could have waited to buy but bought anyway, and those who HAD to buy. Buyers -- at least savvy ones who can still afford to wait -- aren't going to pay the still-too-high home prices current sellers are asking. As you said though, if those "bought-too-high" owners can STAY in their homes for a long time (maybe 5-10+ years I'm guessing), the overvalued/inflated house they bought WILL catch-up over time price-wise and be valued at that price. But that's over the LONG haul because real estate DOES (still!) appreciate over time. The question is just how fast it appreciates. Regardless, in the short-term -- if these "bought-too-high" owners DO have to sell -- they're going to take a "noticeable" (!) loss and pay for their foolishness/impatience with some serious money. No way around that. -- BR
I think people are still uncertain about the housing market and are super cautious. What do you think?
Need help with real estate? Visit coloradohomebuyerassist.com.
I agree great information thank you always and hi 👋
You are so welcome 🤗
Well, Iris, of course you're correct when you point out how HUGE just 4% interest rate difference makes in a house pay't. I don't think most people are aware of that as "just a few %" doesn't SEEM like it'd be anything major -- but it is! Meaning, its impact on the P&I part of the whole house-pay't of course, since all else will remain the same (property tax, home ins, HOA if any, etc.). And a 3% mortgage rate (what is was just a few short years ago) vs. a 6-7% rate today is a very "eye-opening" example.
However, for me 3% is still a tad high -- but I'd jump on 2.960% for sure! ;-)
Seriously though, MANY buyers refused to buy during the "housing market feeding frenzy" of the outrageously high/overvalued/inflated house prices 2-3 years ago (the auto-market then was just as insane, BTW) because they could see the foolishness of that and refused to "enjoy" home-ownership while also experiencing being incredibly House Poor. And now those same "still waiting buyers" have no interest in "bailing out" those earlier buyers trying to cut their losses by buying their still overpriced/overvalued homes, especially when interest rates are ALSO still too high. Even if there were very good reasons for buying when they did -- they HAD to buy (had no choice) -- the fact remains they still bought HIGH.
But real estate is much like the Stock Market: You buy low and sell high, yes?
So the "bad numbers" (underwater) are the same for those who could have waited to buy but bought anyway, and those who HAD to buy. Buyers -- at least savvy ones who can still afford to wait -- aren't going to pay the still-too-high home prices current sellers are asking.
As you said though, if those "bought-too-high" owners can STAY in their homes for a long time (maybe 5-10+ years I'm guessing), the overvalued/inflated house they bought WILL catch-up over time price-wise and be valued at that price. But that's over the LONG haul because real estate DOES (still!) appreciate over time. The question is just how fast it appreciates.
Regardless, in the short-term -- if these "bought-too-high" owners DO have to sell -- they're going to take a "noticeable" (!) loss and pay for their foolishness/impatience with some serious money. No way around that.
-- BR
Well said! Thank you for sharing 😊