🤔 Where is the real estate market going? So much confusion.
If you watch the news or get your information from social media, there are conflicting information from different sources as well as from different locations.
👉 Simple rule: follow the money. See who is making money to find out where the market is going. The market will follow and fund those who are making money and this will drive the direction of the market. DON'T LISTEN TO OPINIONS AND FEELINGS.
Everyone has opinions and opinions are based on feelings and things that cannot be measured. Earnings or who is making money, however, is data driven. No emotions, feelings or view, just data.
As of right now, we have a massive shortage of housing inventory. We had this since the last recession of 2008 when the new home construction industry was devastated and many smaller regional players went out of business. Hence, home building fell behind, especially the more affordable homes. National builders simply focused on the higher price, more profitable homes. As a nation, we never caught up to building the necessary amount needed to satisfy demands, especially affordable homes which were built by smaller regional builders.
Fast forward to now. This time, due to rapid rise in mortgage rates, sellers who would typically sell are not selling because they fear not having buyers who will purchase their homes. Or if they want to move up, they don’t want to take on higher mortgage rates on their upsize purchase. Huge problem affecting inventory.
Builders now have gone through their unsold inventory which was a huge problem for them last year. Even with higher rates, those who need to buy are still buying because there is a shortage of housing. Therefore, the builders are back and have been increasing their applications to build to meet the demand created by sellers refuging to put their houses on the market.
Record profits and stock prices for home builders and individual sellers realizing there is low demand and competition for homes when the come on market will create momentum. More and more of those sellers sitting on the fences will be getting off to meet the demand as prices rise in those areas with higher income buyers. This is not simply a prediction, this is how the markets always work. When demand is high and supply is low, someone will step in to fill the need. Economics 101.
And during times of confusion and uncertainty, I would rather follow data than feelings of talking heads on TV.
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