It’s 2019. Where’s The Real Estate Market Headed Now?
It’s been a bit over a decade since the Real Estate Crash of 2008. When the worldwide banking system nearly collapsed. The banks were all doing what we called “Breath Loans” (if you could fog a mirror, you could get a loan) based on No Documentation Loans. These loans were great! You could say you made a million dollars on your loan application & you didn’t have to provide any documentation to the bank to prove it! It was brilliant! Then Wall Street helped the banks sell these “junk loans” as AAA investments to unknowing investors. And one day, it unraveled. You remember 2008, yes? Those loans started to go into default because…SHOCKING NEWS! Some of the people who got the loans had no ability to afford the payments. Then everything went into a sink hole. Tons of foreclosures and Short Sales. Millions and millions of them across the US.
The “Mortgage Reform” era followed and we’re probably not going to see anything like that happen again. At least in our lifetimes. Unless you’re reading this 50 years after I wrote this, then…you’re on your own to figure it out!
Fast Forward A Decade
…and here we are. Interest rates are still low. The economy is still going strong. Wall Street has had a couple of recent corrections. Check – Check – Check. So now what’s going to happen?
We’re in the 4th Quarter…Somewhere…
We’re certainly in the last part of this market cycle, which usually lasts 10 years or so. And we’re there. Waiting. In some parts of the country, markets have already started to soften. In others, they’re still fairly strong, but certainly not as strong as, say 2015. Interest rates are still low and they’re expected to rise. We expect them to rise. Except the “experts” have been telling us they’re going to 5.5% on long term mortgages for over a year and…they’re still in the high 3’s% to low 4’s%. That’s good! They’ve actually relaxed a bit since December of 2018! But, judging on what’s going on out there, and my ability to count by 10’s… we’re nearing the end of this cycle.
Yes… But What Does This Mean?
If you’re a Seller. If you think you want to sell in the next 5 years or so, SELL NOW! You’re at the top of the market! Even if your market has started to slide a bit, sell now! It’s higher than it was even 2 years ago. You’re at the top. Now’s the time to sell.
If you’re a Buyer. BUY NOW!
You say What??? You just told the Sellers to sell because we’re at the top & indicating the market may slide a bit down. Yes! I totally said that. Think about it. If interest rates go up to 5%+, and you can secure a property at the top of the market with a 30 year fixed interest rate in the high 3% or the low 4% range. You do the math. If you wait for prices to drop and rates go up another 1.5% to your monthly payment. You might be surprised that this is the time to get into home ownership rather than keep renting. Or scale up or scale down. The timing is right for everyone! IF you’re a market timer, and the market doesn’t drop like you want it to…and rates go up another 1.5%. You lost in the gamble.
The moral of this 2019 story is there’s probably a little more steam left in this market cycle and there’s less time to gamble on interest rates staying low. There… now don’t you feel better? If you want to buy… do it! If you’re thinking about selling. Do it! Call me!
Also if you’re interested in South Bay Real Estate click the link to search for homes there.
This blog post was facilitated through BuildMyAgent. This network is quickly becoming the gold standard for everything to do with real estate marketing.