The current state of the housing market has been described by many as unsteady, unpredictable and highly competitive. For many years before, it has been an expectation that the positive trend of steady growth in prices would continue.
It started with a decision made by Congress in September 2020 to pass the federal eviction moratorium. This temporarily prevented landlords from evicting tenants unable to pay their rent due to hardships caused by the COVID-19 pandemic. In response to this, some areas experienced temporary slowdowns in home sales and price growth.
While this was going on, many individuals found that their cost of living had significantly increased during this time. Thanks to the new work-from-home culture and widespread loss of income, many saw this as the perfect opportunity to move to a less expensive area.
People were moving out of the high cost states in droves. This all eventually caused a massive shortage of housing inventory, resulting in a sharp growth in prices. The market became incredibly competitive for sellers. Many experienced multiple offers on properties leading to bidding wars which drove up prices even more.
These were some of the highest home prices that many markets had ever seen.
Until now, the localized housing markets across the country performed in very similar manners. Some areas of the country are experiencing an oversupply of homes, causing prices to fall. These areas have drastic differences in pricing trends and behavior compared to areas where supply is still very low and competition, as well as prices, remain high.
There may be more opportunities to find a good deal since some sellers may be more motivated to sell quickly, which could lead to lower prices or favorable terms for you as the buyer. But as stated before, there are many different housing climates happening across the country. Prices are unpredictable, which can make it challenging to determine whether you’re paying a fair price for a home.
Talk to your financial coach to explore your options.
When planning to buy a house, you need to take into consideration not just the cost of the home, but also homeowners insurance, HOA payments, property taxes, and utilities. Expect some home repairs that may not be covered by your home warranty.
It’s important to not rush into a decision. Take the time to thoroughly research your market of interest, compare properties, and consider your long-term goals before making an offer on a home. By working with a coach, they can help you decide if that “once in a lifetime” deal fits your budget.