Ok, so every time you look, each time you pick up a news feed, and practically whenever you tune into the nightly news, you see some Real Estate pundit giving you advice on what you need to do to deal with the current set of circumstances in the market. Some of these experts are spot on and some seem to further confuse the issue and most of us simply come out scratching our heads thinking we still don’t know what the hell is going on and most of us still don’t know what to do. This was further illustrated in an article I just read in the June issue of Realtor Magazine entitled: Contract Signings Slow, But Buyer Demand Is Still High.
In this article, NAR Chief Economist Lawrence Yun tosses around a number of scary statistics showing how “Low inventory is the primary reason contract signings are down a whopping 22% from a year ago, while pending sales fell 2.7% month over month in May. Ok, not sure what that means exactly, but it doesn’t sound great. Here’s what we are still seeing here in Buffalo. We are still seeing well priced properties in good shape fly off the shelf with multiple offers still the norm. We might not have 20 offers on every property but the home that fetched that much interest last year will still garner at least 10 offers. So from a practical perspective, this sounds like a market that is still pretty darned HOT. If you want the simplest way to cut through all the statistical legerdemain, here is all you need to know and there’s some good news too. You don’t have to be a math wiz, a statistical guru, or a genius. First, NEVER forget the law of supply and demand. Now consider the one gem of a fact that our fleet footed economist was smart enough to include in his statistical rampage. “The current supply of existing homes is about half the level it was in 2019.” NAR’s research shows.
Bam! That’s it. So in just 4 short years there are about the same number of buyers today competing for about half as many houses. Got it. This is a game over fact. If you want to buy today, you have to have all of your ducks in a row, and you absolutely have to be ready to step up and pony up when you see the house you want. As a side note, the Covid thing didn’t help matters for you, but even as such, the situation would not have been all that different because of the ridiculously low interest rates everyone simply came to expect for the last 10 years or so.
So if you are thinking that you have some insider secret as to when the rate is going to go down, here’s what I say,
“Good luck with that.”
Even if they did drop a little it doesn’t and will never trump the “supply and demand” rule.
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Author Brendan J. Cunningham is a New York Licensed Associate Real Estate Broker, lead of the Platinum Team at HusVar Real Estate, as well as an accomplished writer, Shakespearean trained professional actor, and podcaster.
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