We all know what headwinds buyers are facing in the current market. But we also know that even buyers lucky enough to buy at lower price points and record low interest rates over the past two years faced a perfect storm themselves, as inventory shortages and intense competition produced the most extreme seller’s market in recorded history.
Today, those trends have more than reversed. Housing supply has made its biggest about-face ever – up close to a 20% from a year ago – bidding wars have dropped precipitously, and prices have stabilized. The upshot is that buyers who are able to surmount the financial challenges of today’s market have the time, the options and the leverage to close on homes that tick every single box on their wishlist. It’s forever-home time, for the first time in a long time.
Additionally, the cost of purchasing today may not be as steep as it seems. The ability to choose carefully, inspect thoroughly and exploit contingencies to the fullest can mean not having to replace a roof two years in, or build an expensive addition down the road. Those hidden costs of homeownership are much lower today than they were during the buying frenzy.
For anyone still stuck on the sidelines, help is on the way. Major investors are betting big that the Fed will slash interest rates as soon as January, which coupled with home price stabilization should usher in a healthy, resupplied market for 2023.
Source: The Wall Street Journal, Zillow