Q: We want to buy a home with these low interest rates. We’ve lost out on eight properties. All the while, internet influencers speak of a housing bubble or crash. Last week, financial experts were now talking about a possible recession. Should we continue home shopping despite the negative news and fierce competition or sign another lease on our apartment?
A: Some online personalities have monetized negative housing news during this seller’s market. Conversely, the real estate economists that I follow do not avoid the foundation of the current housing boom — such as low inventory, supply chain issues, labor shortages, historic low-interest rates and decades of building too few homes. Lest we forget, COVID-19 has not forgotten us. The home has gained importance as a remote workplace and full-time haven.
Thanks to the pandemic and today’s technology, I no longer have to travel to hear a real estate economist speak. Every day, I can read their posts. Every week, I can join one of their video calls. They share an apparent consensus that the housing market will remain strong despite inflation, high gas prices, a war in Europe and the yields of the two-year and 10-year treasury notes.
One year in the 1990s, I was the buyer’s agent in over 30 transactions with interest rates twice what they are today. Most were first-time homebuyers and all fared well with their purchases. According to the Realtors Property Re (RPR), the Sunnyvale, California, home my parents bought new for $23,000 decades ago has an RPR value of $3,283,650.
Keep in mind that economists rely heavily on demographics. They remind us that the older millennials will continue to enter the housing market en masse. So, if you think it is hard to buy now, wait a year or two.
Questions, concerns or inquiries? Realtor Pat Kapowich is a Certified Real Estate Brokerage Manager and career-long consumer protection advocate. His hometown of Sunnyvale, California, is where he is based. Office Landline: 408-245-7700, Pat@SiliconValleyBroker.com Broker# 00979413 www.YouTube.com/PatKapowich