The Expert Podcast

• What’s happening with real estate prices?
  • There's been a lot of speculation about whether home prices will rise, fall, or remain the same. The bigger question is why these changes might happen.
• Why prices might go down or stay the same:
  • Just because prices have gone up in the past doesn’t automatically mean they will go down.
  • Historical patterns, like the 2008 housing crash, must be compared carefully. Are the same factors in play today?
• Affordability is more than just price:
  • Current interest rates, combined with high home prices, make the average mortgage payment around $4,000–$5,000 for a $400,000 home.
  • This can make homeownership out of reach for many buyers.
• Factors influencing home prices:
  • Home availability and supply: If homes are scarce, even high-priced ones may sell quickly due to the need for shelter.
  • TD Bank predicts home prices will bottom out in early 2023, but we’re still waiting to see if this is true.
• The uncertainty of price predictions:
  • While many expect prices won’t increase further, the future of home prices is uncertain due to the balance of buyers and sellers.
  • If prices drop 5%, 10%, or even 20%, they would still remain higher than they were in 2018, especially considering today’s mortgage rates.
• Employment and finances play a big role:
  • People still have jobs (even if they’re not high-paying), and many are adjusting their finances to manage high costs.
  • Buyers may still be able to afford homes, but sellers may not be willing to lower their prices significantly.
• The stalemate in the market:
  • Both buyers and sellers need to agree on prices. Sellers are holding out, not wanting to discount their homes.
  • The lack of new inventory and the continued 5-million home shortage in the U.S. adds pressure on the market.
• Foreclosures and inventory shortage:
  • There won’t be a massive wave of foreclosures because lending was less risky this time around.
  • While tenants may face evictions, homeowners are not under immediate threat of foreclosure.
• What’s next for the housing market?
  • It might be a stalemate, where buyers aren’t buying, and sellers aren’t selling. People will likely stay in their current homes longer.
  • New housing construction is down due to uncertainty, just like the auto market, where dealers struggle to sell cars at prices they purchased them for.
• The risk of price drops:
  • For a price drop to happen, sellers need to be willing to accept lower offers. Right now, many are not desperate to sell.
• Possible triggers for market changes:
  • Job losses could trigger a wave of home sales, but this is not a major concern yet.
• Your thoughts?
  • Drop your comments below to share your opinion on the current state of the real estate market in your area.