If your business focuses on refinances, then you have been hit the hardest and seen a 70-90% drop in business since last August. If you are in the purchase market, you have seen the most dramatic seller’s market flip seemingly overnight and, while buyers are starting to flex their muscles again, many sellers are not yet on board to drop their prices.
But shockingly, if you look at the news or talk to your friends and family that are outside the world of real estate, few people have any awareness to the true facts of what is going on in the industry. Even more to the point of this article, unless you are actively trying to find out what’s going on in the market, you cannot find the information with ease. We see this lack of coverage as an opportunity to share some knowledge and insight on what’s really going on in the residential real estate market. We’re going to focus on a new series of blogs and short videos (follow along with our IG Reels) where we explain what’s really going on and provide insight into the history, the players, how things fit together, what creates these conditions and more. We are going to do our absolute best to focus more on facts and try to leave all of the opinions and politics out of it.
Real estate market trends and statistics are rarely front-page news, it is not very sensational. Even more than its lack of sexiness, it is a very complex system with a multitude of layers. Understanding these layers helps us predict what’s coming, but there is by no means a fool proof way to predict the market with any degree of certainty. Most people in the industry were taken off guard this year, as more people thought they would see these interest rates in 2023.
Here at Cook & James we try to marry panic with preparedness and always deliver the (sometimes ugly) truth. And the truth of the matter is this: prices are now 43% higher than they were at the start of the coronavirus pandemic, and the average rate for a 30-year fixed mortgage is rising to 6.82%. But the silver lining is this: home prices decreased 0.77% from June to July, which is the first monthly fall in nearly three years.
We, like many of you, hope that we are actively enduring the most painful part of the real estate market reset, but only time will tell. What we do know is that this is a cyclical market and what goes up (late 2019 – 2021) must come down (2022). And make no mistake, the market will regain normalcy with time. As prices continue to drop, the time to invest will be upon us, so be prepared to take the bull by the horns!
Keep an eye out for more market updates in our upcoming Instagram Reels series, "What's Reely Going On,” where your Cook & James team will discuss market trends, what to expect, and how to interpret this abundance of real estate industry information. As always, we welcome you to follow along and join us for more exciting updates and thoughtful insights by clicking the icons below.