Answering the Question: “Is Now a Good Time to Buy Real Estate?” with David Childers, President, KCM

Real Estate
Should I buy a house now? This is the most pressing questions real estate agents are being asked right now. To help you form an educated, well thought out response to this question, David Childers, President, of Keeping Current Matters goes over a number of slides to show the direction the real estate market might be headed.

He answers the following questions:
Will the real estate market crash in 2023?
Will interest rates come down soon?
Will real estate prices come down?
How will a recession affect real estate?
What should real estate agents do to grow their business?

Buying a home is an emotional decision, so our ability to speak logically and to have a fact-based, opinion on where the market is headed is critical for agents to be able to serve their clients at the highest level. “Our job is to educate the potential buyers, not to convince them to do something they don’t want to do,” Childers said.

Childers says there are two main questions that must be asked of potential buyers:

What do you believe about interest rates?
What do you believe about real estate prices?

What do you believe about interest rates? Are mortgage interest rates going up, are mortgage interest rates coming down?

Childers stated an agent’s ability to provide visuals and perspective, are the best way to assist clients in forming their own fact-based on interest rates. The first step is to define reality. As the chart in the video shows, mortgage rates have shot up from 3.2% at the beginning of January this year, to nearly 7% in October. This represents the fastest rise in interest rates in fifty years.

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“This has added about $1,000 a month to the average monthly mortgage payment since the first of the year. When sitting with someone I want to show them this to acknowledge the fact that this change has slowed the number of home sales. This is one of the main factors leading people to ask whether they should buy now or wait.

This is the point where we can provide our relevant, market perspective based on fact, not based on what someone said, or what I heard, but based on what experts are saying about interest rates,” Childers said.

While mortgage rates are expected to continue to drift higher, over the coming months, much of the rapid increases in rates is likely behind us…

Mark Fleming, Chief Economist, First American

While rates are expected to continue to move higher in the short-term, why is that? It is all about inflation right now. It’s the fed’s fight against inflation. The fed doesn’t control mortgage rates, they can only hope to influence them through fed policy. That policy to fight inflation has been a catalyst for the higher mortgage rates we’ve seen.

What do you believe about real estate prices?

The biggest challenge facing buyer sentiment is the sensationalism of the difficulties the real estate market has. This can lead to a distorted view of what is accurately happening in the market. Finding what the experts are saying about the market and future predictions regarding home prices is another way to bring a relevant, market perspective based on facts. The average home price forecasts for 2023 from the MBA, HPES, NAR, Fannie Mae, and Ivy Zelman is an increase of .2%. The highest forecast for price appreciation of the five being from MBA for 2.8% increases in average home prices in 2023 and the highest forecast for depreciation being from Ivy Zelman being 4%.

The video goes over the expert opinions and the nonfinancial factors that go into buying a home as well. These factors oftentimes influence decisions to buy a home as much as financial decisions.

For more information about Keeping Current Matters visit:

https://www.keepingcurrentmatters.com/
https://www.instagram.com/keepingcurrentmatters/

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