The Bohnker Group
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Professional Purpose
The Bohnker Group’s professional purpose is to help you, our buyers and sellers, to make the most informed decision on your biggest financial investment. We will educate you on the macro market shifts, inform you of specific hyper-local market trends, and advise on all possible solutions to meet your real estate goals. Your representation matters. We have over 15 years of experience and backing us is the Jameson Sotheby’s International Realty iconic brand that brings nearly 300 years of trust, recognition, and respect. The name alone opens the most prestigious of doors, creating opportunities and connecting affluent sellers and buyers worldwide.
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As the real estate market continues to change and shift, we believe interest rates and inventory will be key indicators and drivers going into the spring market. And by all indications, interest rates will continue to move in a downward direction and inventory will remain on the lower end.
The biggest questions facing buyers and sellers today are:
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What's going on with the real estate market?
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What will happen with mortgage rates?
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Is now a good time to buy?
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Is now a good time to sell?
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Is real estate a good investment?
Our goal at The Bohnker Group is to provide perspective so you have clarity and confidence in making one of the biggest financial decisions of your life. So let's jump into it!
Housing Market:
We all remember what happened in 2008, and unfortunately, the words "recession" and “housing bubble” immediately bring back memories of the crash.
There are, however, a few big differences between today’s market and what lead up to the crash. Here are the reasons today is nothing like the last time.
Before the Great Recession of 2008, the housing market had:
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Loose lending standards
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Oversupply of homes
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Over tapped equity
Today’s market looks very different:
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Much tighter lending standards
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Undersupply of homes
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Significantly more equity
In fact, homes prices appreciated in four out of the last six recessions.
Home price appreciation is moderating and prices month-over-month have depreciated for the past four months on record (July-Oct), but there’s a strong case to be made that the worst may be behind us. Expert forecasters aren’t calling for a free fall in prices. The latest data shows a case to be made that the biggest portion of month-over-month price depreciation nationally may already be behind us. Even those numbers weren’t significant declines on the national level. The following chart confirms prices aren’t dropping steeply and may be an early signal that the worst is already behind us.
Mortgage Rate Projections:
We can never truly foresee what’s going to happen, and there is unpredictability with today's housing market. Many experts, however, believe mortgage rates have peaked and are predicting continued home price appreciation.
Home Buying & Affordability:
No question, one of the biggest catalysts impacting the slowdown in the housing market was the rapid rise in mortgage rates. Interest rates have more than doubled in a 12-month period, many consumers were forced to put their buying or selling plans on hold because of affordability.
Any drop in mortgage rates helps boost purchasing power by bringing down your expected monthly mortgage payment. For reference, a 6% rate instead of 7%, buyers pay about $2700 less every year on their mortgage.
Foreclosures:
As "recession" and "housing bubble" continue to be hot topics, the foreclosure topic seems to follow right behind. According to the Year-End 2022 U.S. Foreclosure Market Report from ATTOM, foreclosure filings are up 115% from 2021, but down 34% from 2019. It's important to put the 115% increase into context when discussing today's housing market. Here is why:
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There was a foreclosure moratorium during the pandemic
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Not as many homeowners are at-risk due to stricter lending standards in the last 15 years
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Most homeowners have more than enough equity to sell their homes, rather than foreclose
I hope this has given you some perspective and clarity on today's housing market and how the data is trending as we head into spring. Each local market has it’s own unique set of market conditions, it's important to know that, and you’ll need a trusted advisor to help you navigate it.
If you or you anyone in your circle of friends, family, or colleagues could use our real estate expertise, we would greatly appreciate the opportunity to connect and be a part of that conversation.
-The Bohnker Group