Since, no one, has, yet, been able to discover, a Crystal Ball, which can, consistently, identify, the future, and real estate – related, market trends, and behavior, it makes sense, for, real estate professionals, as well as qualified, potential buyers, and sellers/ homeowners, to better – understand, some of the factors, which impact home pricing, and prices! While pricing is what one lists his house for, on the market, prices, are, what it actually, sells – for! Since, we are presently, witnessing, one of the fastest – rising (in terms of pricing) markets, in recent memory, many are asking, what does the future, hold, etc! As a Real Estate Licensed Salesperson, in the State of New York, for over 15 years, I consistently, warn people, do not try to market – time, but, rather, proceed, in a well – informed, realistic way, based on one’s specific needs and priorities, and personal situation. With that in mind, this article will attempt to briefly, identify, review, consider, and discuss, home prices, as they relate, to the current market, short-term, intermediate, and longer-term ones.
1. Present Day/Immediate: In many areas, we have witnessed, in the past 6 to 12 months, a 20% or greater, increase, in home prices. I am amazed, in my neighborhood, houses, I feel are nice, but not extraordinary, are selling, for 1.2 million dollars, and more! While, those considering, selling, should take advantage of this, before trends, change, potential buyers, must identify, whether their purchase, is intended, for the shorter, or longer – run! Factors creating today’s conditions, include: near-historic-low, mortgage interest rates; post-pandemic perceptions and priorities; emotions; and desire to relocate, etc. How long will this continue? My guess, would be, it would, first, slow – down, and, then, level – off, and perhaps, the single, biggest cause, might be mortgage rates! Affordability of down-payments, and closing costs, etc, become bigger limitations, as prices, rise!
2. Short-Term: How one defines, short-term, is significant, in terms of determining, what might be! If, we consider it, to be, from, about 6 months (from now), to, about 3 years, from now, if economists forecasts, are somewhat – accurate, chances are, prices will not rise, significantly, etc.
3. Intermediate – Term: Defining intermediate – term, as from about 3 years, to perhaps, 10 or so, years, from now, it becomes more challenging to predict! Will we witness, another example of real estate cycles, or, will, aggressive prices, even if, not at present – day, paces, become the new – normal?
4, Longer-Term: For those, planning to hold their home, and live there, for 10 or more years, we will probably witness, pricing, corresponding to the inflation rate, market conditions, and, the specific, geographic area! In other words, longer-term tendencies, will probably, return to what we consider, historic, normal trends and tendencies!
Remember, this article is intended to help you, more realistically, consider, home price, tendencies, and behaviors, but, there are never, any guarantees! Wise home buyers, should identify, what they, personally, seek and need, and why!