Today, July 28th 2022, marks the fourth Federal Reserve interest rate hike this year.
It begs the question, is it still a good time to SELL and is it still a good time to BUY?
2020 – Q1 2022 explained: the global pandemic unequivocally ignited a housing frenzy. Experts believe the pent up demand that remains today dates back to 2008 (buyers previously awaiting a “crash” as is/was the typical cycle). Meanwhile, baby boomers, who provide a reliable flow of inventory, weren’t moving. Inter-state politics added a new layer of demand that turned pro-business markets, like those in Florida, from secondary housing markets to primary housing markets. Cue the first quarter of 2022: media headlines were littered with the Fed’s promise to enact a series of rate hikes for the 2022 calendar year. Naturally, demand surged. In fact, the National Association of Realtors reported the first quarter of 2022 brought double digit price appreciation for 70% of metros.
Is it still a good time to SELL: if you are looking to sell in the next two to five years, sell now. The market is normalizing. Prices have unequivocally come down. If rates continue the upward trajectory we’ve seen this year, your buyer pool will only get smaller. Only so many people will be able to afford your home at your price. You will need an extraordinary one-of-a-kind property to defy be a proven outlier and even so, time will provide new competition. CASH…
Is it still a good time to BUY: if you are looking to finance a primary residence within the next year, buy now. You don’t ‘live in’ the purchase price; you ‘live in’ the monthly payment. You may have to settle for a smaller or less ideal home. Even worse, you may be priced out of the market with tightening lending standards as banks pull back on LTVs and non-QM loans.If youre a flipper and want to get out in 6 months – theres a lack of product – this is good. Cash investors.