January Market Update

Jan 26, 2022

Everyone loves surprises and Santa brought us a massive one in the state of Connecticut where we saw median sale prices jump from $310,000 to $314,000. Now, why is that such a big deal? It’s because normally, from October till around February, we see prices start to cool off and then heat up in the Springtime. Well, that didn’t happen this year and we saw the big word ‘support’ happen for the real estate market. Why is that a thing? Well, because if all of the houses in the state of Connecticut were to sell out right now and no homes were to come out to the market. We have only about one and a half months’ worth of inventory. That’s shocking. That is the lowest it’s ever been in ten years and yet, during all of that, sales have continued to increase. We’re seeing houses take about three weeks in order to sell at the most. It’s pretty incredible, which means that right now, it may be some of the best times in order to buy or sell a home.

“But David, my friend just told me that prices were right about to drop.”

Well, that would be kind of typical if this was a ‘fad,’ meaning there wasn’t a lot of support like I just talked about to the real estate market. Instead, right now, we actually started seeing prices increase in December and could increase all the way through the rest of this year.

“But I’m worried that if I buy now prices are going to drop eventually, and then I’m not going to have value.”

This is a super common concern, and I can totally validate that. No one wants to make a mistake and especially no one wants to be left holding the bag feeling like they made a bad decision, especially a financial one. In this instance, we’re actually seeing that America is short about 5 million houses and we can’t build our way out of it because we can only build about 500,000 new homes every single year.

We’re also seeing a lot of corporations ask people to work from home still, which is causing more people to leave metropolitan areas and come to the suburbs like Connecticut and Western Massachusetts. They’re also asking them to work from home for a long period of time, causing people to spend more on their housing than ever before.

“But doesn’t the market always eventually crash, like in 2007-2008?”

That’s a great point. Markets do go through cycles. However, 2007 and 2008 were really about fraud and lending laws, which right now are more airtight than ever before. We just are seeing so much demand in the real estate market so that’s the support that we’re talking about of why it’s still a great time to buy a house and we don’t see the market crashing.

“If the prices are still going up, why wouldn’t I sell my house later?”

Well, that’s a good question as well because you’re probably also going to be a buyer later on down the line and another factor exists within the real estate market right now, and that’s called interest rates. Your buyers in the future may not have the purchasing power that they do right now and nor are you as well have the same purchasing power later on down the line. Our focus here is to make sure you have the best net worth and you may be paying more in interest down the line than you would right now if you bought a house.

“So, if I sell my house, where will I go?”

Well, that’s a good question as well. Most sellers, as I’m sure you realize, are in control right now. Because of that, they can also demand in the real estate market that the buyers accommodate them for the time it takes in order for them to find a house, which means that in some instances, longer closings may be applying or contingency for you to find another house. Or in some instances, a buyer may buy your house and allow you to continue to live in the home even after closing for a specified period of time until you move into your next house.

“Great. So, I’ll consider selling my house but not this second. What are my options?”

Well, sometimes people actually want to sell their house, but they don’t need to sell their house. So they don’t want to put their house on the real estate market. In fact, another option exists that most people don’t know about where they can withhold their home from the MLS, yet still have an agency agreement. There are so many of those houses that we have as inventory that if you’d love to see those as a buyer and as a seller joining that market you certainly can’t. You just need to reach out to us.

If you’re looking to buy, sell, or invest in real estate and you want to reach out and find out about these properties, you can certainly reach out to us at www.brookegrouprealestate.com, or find us on Facebook, Instagram, or YouTube.

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