In Today's Blog:
- Leigh and Rob discuss the nationwide real estate market statistics and the trends for the everyday consumer, home sales, and interest rates.
- Top Five Most Overvalued Markets (Yahoo Finance)
- Five Things to Know About the Next Housing Crisis (Al Jazeera)
- Home Buyers are Canceling Deals at the Highest Rate Since the Start of the Pandemic (CNBC)
- Leigh and Rob get creative when describing a rather unique property.
We know you have seen it in the headlines, you've seen the clickbait too.
We all have. And... Yes, things are getting blown out of proportion. What we have with our current nationwide real estate market is not, we repeat, NOT a crisis, a crash, or another 08'. What we are seeing, however, is a downward trend. A healthy correction if you will. A much-needed one at that.
That doesn't make for good clickbait or ratings though.
So, that is why guru real estate agent duo, Leigh Wilson and Rob Inman, decided to start their own fact-based, real estate podcast. And congratulations to you for being here for episode one. We thank you! Check out their new YouTube Channel here.
The National Real Estate Market & Trends
As the above graph shows, total existing home sales are in that downward trend we mentioned. Prices remain high as interest rates increase, but the interest rates are doing their job. It did take a second rollout for prices to begin coming down, but we are now seeing the fruits of that labor. Our lenders are telling us things are beginning to calm down despite many people fearing 8% or 9% interest rates. Luckily, we aren't there. The hype made it scarier than it needed to be. Shocking. Now, we know most people have gotten comfortable around the 2, 3, and 4% range after COVID; we did too, but we are currently sitting at a healthy 5 to 6% interest rate. That hike does come with some sticker shock, though, as it can up your monthly payment. Most people have not seen the interest rates of years passed where we regularly saw 8 & 9%.
So to clear up that clickbait...
Our lowest point in home sales was the height of the pandemic in 2020, as you can see in the graph. It also shows we are currently above that point today - far from a crash or crisis. Our nationwide median home sale price is going, again, in that downward trend.
The median price of existing home sales is currently at $407,600. That number is still expected to increase with the next rollout of market stats. Keep in mind though, that real estate markets can vary greatly from region to region and yours may not be following the national trends. In San Fransico prices are decreasing massively, yet the national average continues to tik up. This can really skew that national average so for this one just pay close attention to your local area.
Currently sitting at a 14.8% change year-over-year in the existing home sales price and expecting that number to decrease with upcoming data, makes for a healthy market. We are expecting that number to drop to 10% or 11% in the coming months. A year ago, went that percentage was sitting in the mid-20s, which was not sustainable, that was screaming "crash". Today though, we are happy to see this percentage has been steady, with no great spikes or quick drops in the past few months, and that is a sign of a healthy market.
"When you buy a house and you are making that final financial decision for your family to buy a house, you should be looking at anywhere between 2 and 6% appreciation in most markets. That'd be a healthy market. That's good. Over years you get that appreciation. This is crazy. When you can buy a house, turn around in 2 years, and make $150,000 that's not sustainable."
- Rob Inman on home sales price change year-over-year from 2021 to today.
During our COVID bump, existing homes went way up, and we are now seeing that begin to taper back down and expect it to continue or at least stay the same with the new market stats coming up. Which is fine, that is what we expected. We have got a lot of uncertainty with interest rates and home buyers really having to calibrate differently to buy a house now. So, we expect that number to stay down for a while, and that is the goal of the Feds raising interest rates.
See, not so scary. Just a little change, but no crash, no crisis.
Leigh and Rob will be discussing top real estate articles in each episode of their new podcast. In this episode, they chose to start with the one that mentions our very own Boise and Coeur D'Alene. That's right, not one but two mentions of our beautiful state. Of course, that article is about the top five most overvalued housing markets (Yahoo Finance) in the nation. Yikes!
Rob defends Boise, "Yeah, we've made up a lot of room because if you compare us to other metros on the west coast, we are still one of the most affordable. So, it doesn't really add up, they see these huge numbers like 73% and this is crazy, you guys are so overvalued. And I'm like no you are forgetting that we were so undervalued for so long."
Leigh astutely notes, "Because we were an unknown market."
Though we all know that is no longer the case, we have been discovered and our world has changed. Coeur D'Alene has had its share of the price increase and changes as well. Check out the full article here to see what other 3 cities joined us on that list, or watch Rob and Leigh's video at the top of the page, or their SoundCloud account here.
Rob chose to discuss one of those “crisis” headlines with the next article, Five Things to Know About the Next Us Housing Crisis (Al Jazeera). We know this is an overused word lately, but this was an interesting article because it was talking about housing prices going down. This “crisis” references an entire generation of millennials questioning what homeownership looks like moving forward.
The last pick for articles to discuss is Homebuyers are canceling deals at the highest rate since the start of the pandemic (CNBC). This one goes into buyers backing out of deals which can happen for a multitude of reasons, but Leigh said it best:
“Well, and I can tell you, I can tell you exactly what's happening. So now, you've got inventory out there, home buyers have choices, home buyers are not having to write deals with no inspection contingencies or even getting, or if they do have one, they get through the inspection. They go, "Well, it's not that bad. It's not going to fall down. We will take it because otherwise, we are going to be homeless." They don't have that now. Now, they can do a home inspection and say, "Well, there are some safety and structural things here." Or "There are some I can find that are better." And if the seller, which sellers are kind of still unreasonable right now, they go to the sellers and say, "Mr. & Mrs. Seller, we want you to do this, this, and this." And then Mr. & Mrs. Seller say, "No, we don't have to do that. We are not doing it." Fine, the deal falls apart. The buyer knows there is another house down the street that they can buy.”
So, now buyers have choices, and we are seeing a more even playing field. Again, signs of a healthy market. People aren’t buying houses out of fear or putting upwards of 10 and more offers in on houses just to get one accepted. Buyers get to take a breath and enjoy home shopping again. Like they should.
It sounds like we are on our way to a happily ever after here. Only time will tell so until then, enjoy Leigh and Rob’s creativity when describing the property below.
For you, realtors out there that are struggling to come up with ways to describe maybe a rougher property that doesn't have a lot going for it and you just need that extra help. This is what we came across. This is not a listed property, full disclosure, it is just for fun. This is up off route 21 in Idaho near Idaho City. It is a fireplace that obviously was in a house at one point. The Gurus glamorize this beauty with the following realtor poetry:
• Open Floor Plan
• Open Concept
• Great Views
• Unobstructed Views
• This property really brings the outside in
• High Ceilings
• Indoor/outdoor fireplace
• Close to nature and hiking
• Great Gardening Area
• Free Flowing Floor Plan
See realtors, you really can get creative!
And for the buyers, sellers, and investors out there with questions about the market or your real estate options you can always reach our team at info@boisesbestre.com or leave your questions in the comments below. We’d love to hear from you so don’t be shy.
