As buyers continue to over bid each other and pay well over asking for homes these days, what is going through the mind of these buyers? Best answer… they still see Real Estate as a solid investment of their money right now.
Even though they hear people saying “it’s got to burst,” buyers don’t care. They want a new home and they are willing to sell some stock and go all in on the housing market. According to Merrill Lynch, J.P. Morgan, Morgan Stanley, and Goldman Sachs, the current real estate market is strong and sustainable. Here’s what was said on their recent podcast Thoughts on the Market:
“Unlike 15 years ago, the euphoria in today’s home prices comes down to the simple logic of supply and demand. And we at Morgan Stanley conclude that this time the sector is on a sustainably, sturdy foundation . . .. This robust demand and highly challenged supply, along with tight mortgage lending standards, may continue to bode well for home prices. Higher interest rates and post pandemic moves could likely slow the pace of appreciation, but the upward trajectory remains very much on course.”
And boy are they correct with the tight mortgage lending standards quote, as you may have heard from some of your neighbors that most recently sold, appraisals are having bigger gaps and these current buyers are paying the difference in appraisal gap in cash.
According to a poll by Gallup “Gallup usually finds that Americans regard real estate as the best long-term investment among several options — seeing it as superior to stocks, gold, savings accounts and bonds. This year, 41% choose real estate as the best investment, up from 35% a year ago, with stocks a distant second.”
Buyers thinking that homeownership is the best long-term investment is fuel keeping this sellers’ market going.
But, if you’ve been contemplating selling, you must ask yourself, how long do YOU think this market will last? If you’re going to sell in the near future anyway, consider selling soon. Capitalize on today’s home prices, before we see buyers changing their minds on this investment strategy and home appreciation levels out. If you want to know what you can sell for in today’s market, give me a call.
By Tiffany Stock, Real Estate Broker, Keller Williams