The housing market has experienced significant shifts recently, including a rise in mortgage rates last year that affected many people's ability to buy homes. Home prices, which had rapidly appreciated for several years, finally peaked last summer, leading to concerns about a price crash. However, despite the end of the buyer frenzy seen during the pandemic, national home prices have remained relatively flat and continued to increase in many markets.

According to Lawrence Yun, the Chief Economist at the National Association of Realtors (NAR), this trend is likely to continue, with only minor changes to the national median home price. Low inventory is a key factor in the current market, and while some markets may experience a price decline, the lack of supply means that a significant crash is unlikely. The ongoing lack of inventory is leading many buyers to bid up prices, and it is unlikely to change significantly in 2023, according to industry expert Rick Sharga.

With homeowners holding plenty of equity and low mortgage rates, distressed sales are unlikely. Therefore, partnering with The Scott Smolen Team who understands the local market and can navigate the current volatility is essential for anyone considering moving this spring. In addition to the low inventory, there are other factors that are keeping the housing market strong.

The pandemic had led many people to reassess their living arrangements and prioritize their housing needs. As a result, there has been increased demand for larger homes and homes in suburban and rural areas with more space and outdoor areas. This trend is likely to continue, as remote work and virtual learning become more common and desirable.

Furthermore, the overall economy has been relatively strong, with low unemployment rates and historically low interest rates. This has allowed many people to maintain their financial stability and continue to invest in real estate. The continued growth of the economy and relatively low-interest rates are expected to keep the housing market prices in the coming months.

There are many homeowners who not only have significant equity in their current homes, but they also have mortgages that are at the historically lowest rates ever.  This has allowed many of those homeowners to keep those homes and use them as rental properties with very high positive cash flows from day #1.  When homeowners decide to move without selling their current home, the housing supply does not increase.  

It's also important to note that the housing market is highly localized, and conditions can vary significantly from region to region and even neighborhood to neighborhood. Therefore, it's essential to work with experts in your area who have a deep understanding of the local market and can provide tailored guidance and advice. In summary, while there have been shifts in the housing market, the low inventory and ongoing demand for larger homes and suburban/rural living are keeping the market strong.

These charts below show the months of housing supply across many of our local counties during the past 10 years.  As you can see, the inventory is very thin right now.  As long as that continues, there will be upward pressure on pricing instead of a downward trend.  

Bottom Line:

With the overall economy remaining stable and interest rates remaining low, the housing market is expected to continue to perform well in the coming months. If you would like to get an idea of what your housing options might be, reach out to The Scott Smolen Team who can provide personalized guidance and advice that is essential for anyone looking to buy or sell a home in the current market.