Whenever we get into a housing market where most sales are the result of bidding wars that lead to what often seem like crazy high prices, we start getting whispers that it can’t last – that it’s like a giant Double Bubble waiting to burst all over your face and hair. And if history is any indication, every housing market has a shift at some point. But it’s hard to figure out just when that point might be, especially with today’s market.
Like most things in our economy, it’s about supply and demand, with interest rates thrown in to make things more interesting.
The Covid pandemic arrived at what many of us thought would become the peak of what was a very strong sellers’ market. I expected the market to soften at least to the point where people didn’t have to do insane things to buy a house, like over-bid and forego every consumer protection offered in our boiler-plate buying offers. But in this case, there was one important difference in the marketplace dynamics: very, very low inventory, which got tighter as the Covid cases peaked and we waited for the vaccines to arrive.
In my own real estate practice, I noticed that many of my clients who already owned houses and were considering a move to a more manageable condo decided to stay put. They began to appreciate not having to live in close quarters where they would share elevators with neighbors, not to mention that they would not be able to use many of the building amenities (like they gym or pool). Others who were younger and thinking of moving from their condos into larger homes, were stymied by limited choices of homes to buy. Not only were few homes coming on the market, but new construction slowed way down, further reducing choices in the market place.
Today, the pandemic is not completely behind us. Neither is the extremely tight inventory of both existing and new homes. In the past, I was usually able to find new construction possibilities to help people avoid bidding wars, but right now builders are facing challenges in the supply chain for the materials they need. While there are possibilities in the very high end of the market, affordable housing is quickly becoming an oxymoron.
How long will this last? Who knows? Anyone planning to jump into this market needs a carefully crafted strategy.
There is an old saying in real estate that the three most important things are location, location and location. But in markets like today’s, there are three other equally important things: timing, timing and timing! And I gotta say, location is a lot easier to understand than timing is.
If you are planning a move, or if you are curious about what your home is currently worth, I would love to help. You can reach me easily by phone or text message at (202)549-5167, and unless I’m driving or in church, I’ll answer or call you right back. You can also email me at firstname.lastname@example.org.