THE MOST COMMON QUESTIONS I AM GETTING

FOLKS! I could pretty much copy and paste last month’s update for this month. I don’t want to. You don’t want me to. Instead, I want to answer the most popular questions I’m getting lately. I hope to bring you a real valuable look into the market and clear some of these misconceptions up.

WHERE ARE THESE BUYERS COMING FROM? 

This one is also usually more of a statement than a question. I hear a lot of, “Well, I don’t know why all these people are buying, this bubble is going to pop any day.” OR “I’ll just wait to buy when this bubble pops and save myself a couple hundred thousand.” 

Just stop. Seriously, stop it. I saw the below image online this week. I now think about it every time I have to talk “bubbles.”

Contrary to popular belief, I don’t just play golf and take clients to drinks. I actually study the market… like a lot.

Yes. The real estate market will always fluctuate. 

Yes. It will be difficult to maintain this y-o-y raise in home prices. Almost impossible.

Yes. We will most likely see a PRICE CORRECTION in the coming months/years as builders catch up and interest rates lift slightly. This should not be a drastic plummet in home values. This will most likely be a slight slow-down in escalation.

No. This is not similar to 2006 – 2008. We aren’t giving away loans to anyone with a pulse like we were AND home buyers are buying for healthy reasons (low interest rates, moving out of cities to work from home, etc.).

Yes. Unfortunately my buyers that ditched their home search to “wait for that bubble to pop” will still be priced out of the neighborhoods they passed on.

WHEN IS THIS BUBBLE GOING TO POP?

  • This one is also usually more of a statement than a question. I hear a lot of, “Well, I don’t know why all these people are buying, this bubble is going to pop any day.” OR “I’ll just wait to buy when this bubble pops and save myself a couple hundred thousand.” 

    Just stop. Seriously, stop it. I saw the below image online this week. I now think about it every time I have to talk “bubbles.”

  • Contrary to popular belief, I don’t just play golf and take clients to drinks. I actually study the market… like a lot.

    Yes. The real estate market will always fluctuate. 

    Yes. It will be difficult to maintain this y-o-y raise in home prices. Almost impossible.

    Yes. We will most likely see a PRICE CORRECTION in the coming months/years as builders catch up and interest rates lift slightly. This should not be a drastic plummet in home values. This will most likely be a slight slow-down in escalation.

    No. This is not similar to 2006 – 2008. We aren’t giving away loans to anyone with a pulse like we were AND home buyers are buying for healthy reasons (low interest rates, moving out of cities to work from home, etc.).

    Yes. Unfortunately my buyers that ditched their home search to “wait for that bubble to pop” will still be priced out of the neighborhoods they passed on.

    doing the same thing; just watching their Zillow app on their phone hoping a winner comes across. 

WHY IS IT SO HOT?

Again, this isn’t how people usually ask me. It’s usually something like, “What the hell is going on out there!?”  The answer is actually pretty simple; you guessed it, The Rona. Forbes does a great job explaining why in this article from January. Below you can read my bullet pointed summation. First though, you need to understand that this is not just a Northern Nevada problem. This is NATION WIDE! It is more noticeable for sure as we were the 3rd fastest growing state in 2020.

  • Money is cheap! Interest rates are still at record lows even though they jumped a little in the last month or 6 weeks.
  • The Baby Boomer’s kids are starting to buy! That’s right! Those Millennials are starting to spread their wings and leave the nest… FINALLY.
  • Builders are scrambling to catch up with demand. Building is difficult and expensive. Finding skilled tradesmen/women during the epidemic was difficult even when restrictions were lifted. The cost of wood… THE COST OF WOOD IS RIDICULOUS! This is due to covid and trade restrictions.
  • Covid-19 changed how people work. More and more offices are moving to a virtual-based setting and more employees than ever can work from another town, county, even state.

PREDICTION

The next few months are going to be exciting! I expect to see:

  • Median home price continue to rise. Not as quickly, but I stick to median price will hit $500k this year.
  • Eviction and foreclosure moratoriums, both local and federal, will start to expire in June/July. This should bring some much needed inventory as investors are able to liquidate and banks will start to take homes back from those in default.
  • IT WILL GET EASIER FOR BUYERS OUT THERE! I’m an optimist, but I truly believe we will start to level out soon.

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