5 Factors That Will Affect Real Estate In The Short Term!

Although owning real estate has historically been one of the best ways to counteract the effects of inflation, etc., it is important to realize, acknowledge and understand, in the short term, there are seldom any guarantees. ! There are periods of up and down in these markets and, although in some years we witnessed significant growth in assets, etc., there have been and are very likely times when values ​​decline, at least temporarily. At present, we are experiencing a real estate market, which is considered a Sellers Market, with house prices rising significantly and, witnessing, more buyers than available and available homes, and the effects of Supply and Demand. , from an economic point of view. When we combine this, with the effects, of last year’s terrible pandemic (and associated life challenges and uncertainties, etc.), as well as a prolonged, near-record period of very – low (historically) interest rates, it has created, what many believe, is a potentially overheated market. With this in mind, this article will briefly attempt to consider, examine, review and discuss 5 factors that are likely to impact real estate, especially in the short term.

1. Interest rates: Before the pandemic, the Federal Reserve Bank seemed to emphasize, trying to stimulate the economy, keeping interest rates very low. Once, the public health crisis hit, they considered it necessary, to try to do, everything possible, to ensure, an economy, somewhat devastated, by the necessary economic closures, etc., survived and worked, as best as possible. , and therefore, he used dramatic measures to aid in these efforts! Because of this, today’s mortgage rates have, over a long period of time, been at or near all-time lows and, it appears, will continue to be that way for a period of time in the future. When mortgage rates are low, higher home prices are often created because potential and qualified buyers can buy more homes for themselves. Dollars!

2. Inventory / Supply and demand: Currently, the supply of houses, available, for sale, on the market, is especially low and, therefore, we are witnessing an extremely limited inventory! The economic laws of Supply and Demand, therefore, create rising prices, because there are more potential buyers than houses available for sale! How long will that continue?

3. What buyers are looking for / personal taste: Buyers’ tastes and preferences, and what they are looking for, in a potential home, is constantly changing – over time! Therefore, what you are looking for in the present will most likely change in the future.

Four. How long will prices continue to rise ?: How long and how much will prices continue to rise? Will it be increasingly difficult to obtain mortgages, because lenders will be concerned about real estate values, in terms of appraisals, etc? When will buyers start to resist these increases, because potential purchases are perceived as too expensive, etc.? If interest rates go up a bit, and when they will, as they probably will, how would that affect demand and therefore prices?

5. Building supplies on the rise: The cost of construction supplies, for the average new home, is estimated to have risen, over $ 35,000, in the last few months! Obviously, this means that new houses will cost more. Will that eventually create a slowdown, and when these rising costs, running away, will they become more controllable again?

Since no one has a crystal ball, doesn’t it make sense to consider what potential challenges / possibilities they may be and be as prepared as possible? The home should be considered, in most cases, as a long-term financial asset, and avoid, try to market, time and / or speculate!