Dear Olivia,
I recently purchased a house, but I’m concerned that the market is headed for a meltdown and that my home value will plummet. Is this a valid concern?
Sincerely,
Afraid of the Future
There is no doubt that the housing market is different than it was just a few months ago. But the changes in the market are NOT currently pointing towards a housing crash. This is a “deceleration” of the market – things are slowing down, not tanking. There is data to back this up, too.
For example, while some aspects of the economy have slowed (like GDP growth), others are flourishing (like the jobs market). Likewise, there is an absence of a large number of defaulted home loans (as was seen in the housing crash of 2008). In fact, the percentage of home loans 90 or more days in delinquency has fallen steadily since 2008 to a low of .5 percent at the end of last year.
A look at the housing market shows that while demand might not be as strong as it was a year ago, there’s still healthy demand for homes that’s preventing an excess of inventory. For example, as of this writing, there are only 152 active residential listings in all of Fremont County! And nationally, active inventory is growing, but it’s still 43 percent lower than it was in 2019.
So, while things are changing (as is often the case in the housing market), it isn’t time to panic. The value of your home isn’t going to suddenly crash. People that want to buy a home don’t need to worry either – it isn’t going to lose value between now and the closing date.
Perhaps the best way to look at the current market is a reaction to what the market was during the pandemic. The pandemic housing market was red-hot with historically-low interest rates, very little inventory, and soaring home prices. That market simply wasn’t sustainable forever. Now we’re seeing some adjustments in the market – rising interest rates, a little more inventory, and home prices that are stabilizing a bit.
We obviously don’t know what’s to come in the weeks, months, and years ahead, but for now, there’s no need to panic. The housing market is adjusting, and we have to adjust with it!
If you have questions about the market, how it affects you as a buyer or seller, or if you have any other real estate-related questions, don’t hesitate to reach out to me at 307-856-3999.
~Olivia