By Living Room Realty, November 18, 2020
Our buyers continually ask – “Should I offer gobs of money over asking to get this house when we might be in a bubble?”…. This is such a difficult question for Chris and I to answer. We send our buyers the comps for the area, add up the homes recent improvements, try to make an educated ‘stab’ at where we think the bidding war will go, than tell our clients to cap their offer price and walk away. “Don’t be an idiot and bid up a house that isn’t worth it,” is what I often say to buyers. Wait for the market to soften– if you can. Or be ready to hunt for a longer period of time so we can find something that makes sense. We don’t want our clients to buy a home that needs loads of cash for improvement when our clients won’t have money left over to fix their problems.
But should we wait until 2021? According to economists and market watchers, in the real estate sector prices keep climbing month-over-month, even in the face of an ongoing economic recession. We are feeling it big time in Oregon. From the many articles that I have read about our current market in the state of a pandemic, I thought you might like to hear from the pro’s.
Here real estate economists about the next few months:
- This strong buyer activity points to a fall & winter housing market that is more active than normal.
- Mortgage delinquencies and foreclosures increased in August and October 2020, respectively. 1.2% of loans are at least 150 days past due according to CoreLogic. At the moment, the moratoriums on foreclosure have kept lenders from being able to even start their processing of defaults. It will be well into 2021 before you will see a spike in single-family and condo foreclosures which may began to flood the market and help to soften it.
- Homes are being sold at an increasingly fast pace when compared to the previous year. As new inventory comes on to the market. they are quickly taken out of the market from heavy buyer competition. Therefore, housing units are still in short supply with unsold inventory sitting at a 2.7-month supply at the current sales pace.
- Housing prices have surged to new records due to very strong demand but low mortgage rates are helping buyers offset this increased cost. Mortgage rates for housing are anticipated to stay at near 3% over the next 18 months which will keep things easier for buyers.
Sounds to me like we will continue to go UP for another year. Who really knows. Chris and I are here for you should you wish to take the buyer plunge! Just give us a ring and we will be sure to talk you out of buying a shitty house. For real.
