I hate to use the word "crash." Every 4, 6, or 8 years the U.S. economy (average is 5.5 years) goes through an economic cycle. One cycle contains a period of economic expansion, followed by a period of economic contraction. The housing market will typically follow along. These downturns are needed "corrections." Housing prices here in Colorado Springs have been increasing 6% to 10% each year since 2012. I just read a statistic that showed an average housing price increase of over 11% from September 2019 to September 2020 in the Colorado Spring housing market. This is unsustainable and puts the American dream of owning a home out of reach for most couples. Whether it's a war, faulty mortgage lending, or a pandemic, various events will trigger the expansion and contraction of the economy. It is a roller coaster, for sure, and I believe we are at the top of a downturn. Don't panic. Instead, be strategic in working with the housing market correction.
Homeowners, if you are thinking of making a move in the next two years, catch the top of the downturn and list your home sooner than later. Otherwise prepare to spend some time in your home and avoid selling at the low point. During a downturn focus on DIY projects, update your home, and create that favorite space that won't make you feel trapped in your home.
"Don't panic. Instead, be strategic in working with the housing market correction."
Buyers, hang on. We are finally going to move toward a, much needed, buyer’s market. We’re not there yet, but sadly, the pandemic is causing a rise in foreclosures and “on hold” status for sellers. Many people are trying to wait the pandemic out before listing their home for sale. For now, rent. You’ll likely get that $15,000, you sank into a lease, back when home prices are selling under asking price and selection is better. You’ll save money by finding homes already updated, eliminating the process of you settling for an outdated home that needs $30,000 in upgrades.
Don’t fall for the media induced panic. Use this time to plan, educate and grow personally. Try to enjoy the ride and remember: History shows that what goes down, does go back up, even higher than before.
If you need help with your real estate planning during these unstable times, contact me.
Refer to Jay Adkisson’s article to hear another perspective: https://www.forbes.com/sites/jayadkisson/2020/10/29/the-serious-disconnect-between-a-hot-residential-real-estate-market-and-the-coming-tsunami-of-foreclosures/?sh=b434fb667ebc
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