Real Estate Market Conditions – October 2018
Whether you’re a home buyer, home seller, or anyway involved in the real estate market you will have noticed by now that the market has stalled. Whether it’s a vision of what’s to come or an adjustment in the market remains to be seen.
Since the real estate crash of 2008, the real estate market has been on a steady incline. Home sales have increased, home prices have increased and the days on the market have declined from months or years to weeks or months. Some markets have heated up to the point that homes were selling in days.
During the last 7 months home sales have declined every month throughout the nation and I expect that October will continue the trend. The question on everyone’s mind is whether this is a market adjustment or is it the beginning of a more serious downward trend.
The real estate market has been rebounding for the last decade. The markets that seemed to overheat the last few years were those markets that took the hardest hit during the collapse.
In an effort for the real estate market to recover, the Federal Reserve had dropped the interest rates to artificially low rates. In the last several months the Federal Reserve has been increasing the rates every quarter and are expected to raise the rates again when they meet for the fourth quarter meeting. It is anticipated that the rate will eventually increase to 5.5% for home loans. This still is a very good interest rate, but its’ an increase that can impact home buyers, especially first-time home buyers.
To add insult to injury is the fact that the National Debt climbed 1.2 trillion dollars in 2018, with a higher interest rate than before which will compound the National Debt even more.
The real estate market is driven by first-time home buyers. When first-time home buyers enter the market, it enables home owners who are selling their home to move up and the chain reaction begins. Unfortunately, many first-time home buyers are saddled with student loans which eats into their debt ratio, preventing them from buying a home, even though buying a home during a buyers’ market may make sense.
If you are thinking of buying or selling, talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.
As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.