"Honey, you just wait... Once the market crashes, we will be getting that home for HALF OFF" 

I hear this phrase at least twice a week, especially as an agent who enjoys discussing real estate, the economy, and related topics. It's starting to sound like a broken record. I'm not here to judge, because if I didn't immerse myself in this field every waking hour of the day, researching the market and gaining hands-on knowledge, I would understand why someone might have these thoughts.

Let me start by prefacing this article. We will discuss why the market is likely to experience a downturn as we move into the winter season, the outlook for interest rates, and how they might affect the market. Additionally, we will explore the factors that could lead to a further decline in pricing.

I believe that many buyers, both current and prospective, tend to disengage mentally from the real estate market during the period from September to February. I often hear questions like, 'When will the deals come, and when can we expect discounts?' However, if we look back to January of this year and consider the entire metropolitan market, we would have observed a 13% price correction. Strangely, this correction went largely unnoticed. It was, in fact, a seasonal correction, and we essentially rebounded to reach last year's price highs, but the opportunity was there. Such seasonal price corrections are quite normal, occurring almost every year to some extent.

Here, you will find median pricing data for all the counties in metro Atlanta, along with information on the months' supply of inventory.

In my professional opinion, I genuinely believe that a similar correction will happen again this year, mirroring the one we saw last winter. Why do I think this? It can be attributed to a combination of two key factors: interest rates and a reduced number of buyers in the market. Interest rates are currently at a rate similar to what we saw last winter, albeit slightly higher. While low inventory will limit the extent of any price correction, we also need to consider the rate at which this inventory is absorbed. For instance, if there were 50 buyers in a market with 100 homes for sale, it would mean there is a 2-month supply of inventory. Now, if there are only 30 buyers in the market with the same 100 homes for sale, the supply increases to a little over 3 months' worth. More supply leads to more choices for buyers and typically more room for negotiation. There is a caveat to that because not all inventory is equal. Quality inventory is harder to come by and therefore tends to drive a premium. 

*This is very dependent on the quality of the home, where it is priced, location of the home, so consult with a professional to get the full rundown on a particular property* 

Interest rates are straightforward. The higher they go, the less affordable it becomes to buy a home. While interest rates are not permanent, there will come a time in the future to refinance at a lower rate. However, it's essential to ensure that you will be comfortable and capable of paying the rate you secure today for at least a few years. You can speculate on when this might happen, but don't rely solely on that speculation. Buyers have shown remarkable resilience to rising rates over the past year, and those in the market are well-qualified. When rates do decline again, consider the potential impact on the real estate market. It won't take much to significantly drive up demand and, consequently, prices.  

Let's wrap this up. Remember that real estate is incredibly local. What is happening on the west coast can be entirely different from the east, just as it can vary greatly from one town to another. Work with a professional who knows your market, not the mainstream media (MSM). If you're determined to secure a good deal, consider searching for a cosmetic fixer during the months of October through January. The sad truth is that 95% won't, and the same 'we're going to wait for a mega crash' mentality will continue for the next 10-20 years. This logic mirrors what people often say about the stock market: 'Oh, when it crashes, I'll jump in.' The reality is, most won't, and they never do. It's disheartening.

Listen, for most people, real estate is a long-term game, not a get-rich-quick scheme. Here should be your game plan: Be patient, find a solid home in the best area you can afford, and hold onto it. You'll likely fare much better than trying to time an impending crash that may or may not happen.

If you have any questions, don't hesitate to reach out.

Here is my cell: 404-680-0710

Posted by Carson Hulak on


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