You won’t see a market like this again. You can bet on it because real estate is based today on extraordinary circumstances. I believe it’s not going to last long either.
What’s so unusual? The answer is nearly everything. To say that the real estate market is anything but bizarre is missing the point. You don’t want to make mistakes now or be left in the dust when it changes.
What’s A Normal Housing Market?
Is there really a so-called normal housing market? We’ve actually had this often. It’s called a balanced market. This is where the number of homes for sale and number of buyers are balanced. Mortgage rates are not too high too.
To be specific, it takes 5-6 months to sell a house from start to finish and rates are well below double digits. This assumes 2-3 months to secure a buyer and another 2-3 months to complete the sale. You might be surprised to learn that we’ve had strong balanced markets with mortgage rates at 13.5%
Bergen County Real Estate Today
There is nothing normal about Bergen County real estate today. You know that the inventory of homes is low. Do you know that it’s 1/3 of what it was last year? How about mortgage rates? You’ve heard that they’re very low. Did you know they’ve never been this low before ever?
The last time I saw a multiple offer throw away every contingency market was in the 2004-2006 bubble. Before that it was in the 1985-1987 bubble. This is not a crazy bubble. Bubbles are speculative. This is based on the law of supply and demand + flight from urban areas due to Covid 19 + safety concerns in NYC.
Low rates arrive when we’re in a recession or other negative economy. They drop to stimulate the economy and move real estate forward. This is because housing is a major driving force in the US economy. Home prices drop too at such moments. Well not now. We have price appreciation + low rates today.
Buying a house today, even with higher prices, will cost you less because rates are so low. Imagine that? No one could have before this market. How about going under contract in 15 days and closed out in another 30-45? That’s not your normal 5-6 months.
What Should A Buyer or Seller Do?
Thinking about selling your house? Get it listed in the MLS immediately. You won’t see a market like this again. Bergen County real estate was impacted directly by Covid 19. Consider how today’s market will change in the near future.
Herd immunity is supposed to come by June’s end. We see the economy opening up more and more. Traffic has increased, mall parking lots are filled again and people are starting to go out. Confidence is returning. Homeowners are likewise becoming more confident about moving as a result. You’ll see more houses coming on the market before you know it. I give this 6-8 weeks. Still think you should wait?
You want to buy a house. This market is strongly in favor of the seller. Don’t expect that to change. It will be tempered a bit with more homes for sale as we move further into the year. Multiple offers and bidding wars will still happen. Appreciation is projected for 2022 as well as this year. What should worry you are mortgage rates.
While nothing is happening now, it surely will in the future. Let’s say we have a recession in 3-4 years and prices come down 15-20% while rates are at 6-7%. Guess what? That reduced price house is going to cost you more at 6-7%. It’s better to buy sooner than later. Higher rates equal a much greater expense. Why wait years for the next recession cycle anyway?
I realize that this sounds very self serving. Believe me, I get it. You don’t have to ask me to help. It would be nice if you did but this isn’t the point. I’m giving you my best advice based on data and over 34 years of full time experience.
This market is like no other. Fueled in large part by circumstances we hope won’t repeat, it’s extraordinary in many ways. As a result, it’s important to think strategically.
Sell your house now. There’s been no better time. Buy a house now and save more on what your mortgage costs than in any future reversal. Here’s something else – you can’t afford as much house with higher rates in that future too.
Need more help? Have questions? Contact me today.