Traditionally the biggest months for real estate sales have been in the late spring to early summer. Many markets across the country saw a slow down in the fast-paced, competitive environments that we have been seeing for the last two years. This is in part to rising costs, including fuels, food, and other necessities. Many buyers are waiting until summer to see what the market does – hoping for a return to pre-pandemic normalcy.
Is a Return to the Old Normal on the Horizon?
If you’re a hopeful buyer, the sudden change in the market might be providing you with some hope. While the market is indeed changing, a return to the pre-pandemic normal as a whole is unlikely. Housing prices will still be higher than they were before the pandemic, although not as high as they were at the start of 2022. The market isn’t going to change overnight; this will be a gradual progression back down to lower prices, fewer situations that end in bidding wars, and longer wait times on the market for sellers. According to Bankrate.com, “But while the market is cooling, prices are not necessarily dropping. We will still see home price levels that are 15 to 20 percent above what a home would’ve sold for six to 12 months ago.” This gives hope to many, but not all buyers who have been priced out of their neighborhoods over the last year.
A Housing Bubble – Are we There?
Thankfully, no, we are not in a housing bubble. While there has been a massive demand for homes, current regulations surrounding the financial industry have created a failsafe for a housing bubble. The buyers in today’s market are infinitely more qualified than buyers were during the last housing bubble in 2008. This high level of qualification will lead to fewer foreclosures due to homeowners being able to maintain their mortgages.
Can the Market Supply Meet the Current Demand?
Supply for new homes is still low. This is causing a demand for new housing, which can take years to level out. Supply for new homes was already high before the pandemic, but with shuttering of factories, and even higher demand, the supply chain couldn’t keep up. With the soaring interest rates over the last few months, more and more buyers are putting off their home search until things level out. This is allowing the demand for new housing to essentially catch up. Housing demand should slow down due to these factors.
Cash Will Continue to Be King
Competing with cash offers will still be close to impossible. There are still buyers out there with pockets full of cash, ready to spend it on a home without looking for traditional financing. With overall inventory still low, these cash buyers are more likely to pull out their reserves and pay cash for a home they have their eye on.
Making your move across town or across state lines within Rhode Island and Massachusetts can be stressful. At Mateus Realty, we strive to be a comprehensive guide to our clients looking to move to Massachusetts and Rhode Island. For more information on all things real estate and how we operate, visit our website https://www.mateusrealty.net/ or give us a call to set up an appointment at 401-434-8399.