Is Our Current Market Sustainable…
That is a valid and reasonable question; at the beginning of the year, Jonathan Lasner reported we were a weak 1 on a scale of 1-5 (5 being highest), of a real estate bubble. Now, according to the Fitch report, Orange County is hovering in the 5%-9% range of being “overvalued” according to labor statistics and income levels. Now statistics do not a market make, nor is it believed by real estate agents that economists have ever truly understood the emotional complexities that accompany housing decisions as well as human need. It’s quite different from the other investment cycles that economists analyze. RIGHT NOW IS THE LOWEST HOUSING INVENTORY SINCE 2004. You might be thinking, “yeah, and that was a bubble of national devastation.” But remember, interest rates were 6%, and most loans were “stated income”, many of them bordering on lender fraud. This market is quite simple:
- It is sustainable as long as there are more buyers than sellers.
- Rising interest rates are what will slow the market and soften prices because buyers purchasing power will be reduced. Bear in mind that if rates rise it means the economy is moving in a positive post Covid direction.
- It is unknown by anyone how soft the market will land, or what subsequent consequences will be. One thing that is a 100% certain—if you are in a position to sell and have a motivation to do so…the sun may never shine on you this brightly for years to come.
If you have any questions about financing please give us a call at Premier Funding Network, we’re here to help. 714-283-9900.
