Hot Takes on Real Estate Closing 2023!
With holiday season in full swing it is easy to lose track of the housing market with Christmas shopping and festivities completed and everyone looking towards 2024, waving goodbye to a rollercoaster year. But even with the surge of holiday spirit people are still vulnerable to the stress filled happenings such as the housing market, recession or economic downturn while comparing the past to the present. Chief economist of Fortune 500 corporation First American says “homebuyers are being haunted like Scrooge himself by ghosts of the housing markets past.”
Contrary to what many may feel reminiscent of, being the Global Financial Crisis of the 2000s, Fleming infers the current period resembles the housing market of the 1980s. Another time period that witnessed high inflation, high interest rates, and a large influx of homebuyers. Today, the housing market faces a lack of inventory leaving buyers with fewer options. The current market downturn is pretty much the opposite of that during the Global Financial Crisis, says Fleming.
“In historical standards, while the 8% rate is not high,” Fleming says, homeowners are even with the rates of the previous year. The item in question is not specifically the rate itself but at the pace in which it has changed. The rapid change in rates is what has Americans feeling discouraged during today’s economy. For the general public we are able to remember a time when gas was $2 and not closer to $6. Adults are able to remember when housing prices were 40% less, even as recent as 2019 pre-covid.
Also playing a large factor is the demographic shift from baby-boomers to millennials, with millennials entering in to their home buying stages. But, opposed to the previous generations, inventory is less because houses are not being constructed at the same pace. What has been predicted is termed the ‘silver tsunami’ with the overwhelming population of baby boomers looking to downsize and sell their houses which is happening slower than anticipated. What has also been seen are boomers remaining wealthy and healthy over a longer period of time than previous generations also lessening the number of houses on the market then originally estimated.
As we say goodbye to 2023 we are able to understand that even with the minimal rate reductions, refinancing pop, new homebuyers, debate of renting or buying, we can anticipate fireworks during the first quarter of 2024 to set the pace for the rest of the year. Whether it is a continuance of hesitation due to uncertainty or a calamity of homeowners trying to list their homes to capitalize on high prices, hopefully we see positive movement for buyers and sellers during the opening of 2024.