In a recent interview, John Graham, the CEO and Owner of The Legacy Real Estate, offered helpful insights into the current real estate market and shared his perspective on whether it’s a good time to buy or sell a home. With market dynamics constantly evolving, John’s expertise sheds light on how individuals should approach real estate transactions.
New Housing Starts: A Reflection of Past Trends
Housing construction is currently robust in eastern Washington and northern Idaho. When asked about new housing starts and what that means for buyers and sellers, John emphasized the significance of understanding how the real estate market moves.
New construction is the “tail on the dog” in real estate, reflecting past decisions and conditions that are only now affecting the supply of homes. Following the housing market crash around 14 years ago, new construction virtually stopped. Builders and developers, caught off guard, faced bankruptcy as demand plummeted, and many of them went out of business. As the market has slowly recovered, new or revived developers and builders have cautiously re-entered the scene, wary of the lessons learned from the 2008-2009 crash.
The construction we are witnessing today results from projects initiated years ago that have wound their way through the zoning, planning, and permitting processes. At that time, this region was a seller’s market and interest rates were at historic lows. Now that the houses are ready, the market has changed. However, it should not be a major problem for local developers. It is still technically a seller’s market, even if houses are selling more slowly than they were three years ago. Most developers are being more conservative in their approach, avoiding over-leveraging themselves by over-building. The new builds are a sign that this region is still economically sound. If you want to purchase a home, you will find a broad selection and have more time to decide.
The 12-Month Outlook: Buy or Sell?
When asked about the 12-month outlook for those considering buying a home, John’s response was clear: it’s a good time to buy or sell. He emphasized that anyone looking for a long-term investment in real estate will likely see a favorable outcome, assuming they can afford the property and are willing to hold it for a few years.
For buyers, John offered reassurance that even if interest rates were to drop after their purchase, they could always explore refinancing options. Refinancing can serve as a safety net, ensuring homeowners can take advantage of better rates if they become available. At the same time, current rates are in sync with historic rates, even though they are higher than we saw in the last few years.
John cautioned against treating real estate transactions as a short-term investment akin to day trading in the stock market. Real estate, he argued, is a long-term game, and success comes to those who play it as such. He noted that the real estate market, much like the stock market, exhibits fluctuations in the short term but generally trends upwards over time.
In closing, John advised individuals not to become overly fixated on daily market shifts in either home prices or interest rates. Instead, he urged them to evaluate their unique circumstances and make decisions that align with their financial goals. If they can comfortably manage the payments, the overall trend of real estate values suggests that their investment will appreciate considerably over time.
John’s insights underscore that the current real estate market offers opportunities for both buyers and sellers. When shopping for a home, you can’t focus only on the financial aspect. While you still have to consider your financial situation and it is important not to overextend yourself, the key to success lies in taking a long-term perspective and focusing on what is important to you. In most cases, people shop for homes because they want to sink roots into a community and provide their families with a pleasant and stable home life. Those factors aren’t affected by market movements.
The state of the market and interest rates affect housing, impacting home prices, home selection, and how long a house will stay on the market. They will affect who can afford to buy and what they can afford. But If you’re considering buying or selling a home to live in, don’t let short-term fluctuations disrupt or overrule your long-term goals.
To learn more about what is happening in the local real estate market, or if you need help buying or selling a home in eastern Washington, northern Idaho, and Montana, contact John Graham and his team of real estate professionals at the Legacy Group.