Food for thought from Compass' Leonard Steinberg:
Four Things There are FOUR things that have muted real estate markets around the US for the past months and all will soon be resolved or answered.....
Here they are:
ISSUE #1. INFLATION. After a notable surge post-COVID fueled by global supply chain disruptions, cheap capital, excessive government stimulus, lower tax rates, accumulated savings and pent up demand, migration of wealthier people to cheaper areas forcing up demand in those areas for everything including labor costs, labor shortages, etc, inflation is now down below 3%, close to the Fed's 2% target....so while inflation will not disappear (it hardly ever does), it should be lower ....for now.
ISSUE #2. INTEREST RATES. While the FED rate has not been cut yet, the general consensus is that the rate hike era is over and we've already entered the rates-lowering era. The 10-year treasury is now hovering around 3.7% down from a high of 4.988% a year ago, down over 25%. Mortgage rates are also sharply down from their high around 8%, now approaching the 6% mark.....
ISSUE #3. THE ECONOMY. While the economy shows signs of slowing, the powerful US economy is showing its resilience with low unemployment and healthy markets. While down, the NASDAQ, DOW and S+P 500 are still trading close to record territory as the US continues to innovate and expand, albeit at a much slower pace than 2021-22. US companies have been posting record profits. The wealthy (Top 10%) - who own the bulk of the economy (about 67%) - are far wealthier than at any other time in history. Natural gas prices are down compared to 5 years ago, and the US is producing enough oil to offset the Russia-Ukraine war that caused the oil price - and inflation - to spike. Our national debt keeps expanding though and many longterm government policies are unsustainable.
And then there is ISSUE #4: THE 2024 ELECTION. While who our next president will be is important, equally important is who will control Congress and the Senate. Most presidential policies are only possible with the approval of Congress and the Senate. Home buyers are especially focused on tax policies and how some policies might impact inflation.
About 80 days from now we should know the answer to this fourth issue and then, I suspect the markets will open up and begin to ROAR..... the question today to most buyers is: should I wait till then, or act now?
Source - Compass Chief Evangelist - Leonard Steinberg: Did You Know email.