With the past 2-3 years being such a whirlwind in the Real Estate market, it’s difficult to remember exactly how much prices have gone up in what period of time.
Generally speaking, if you bought before the pandemic began in 2020, you’ll still likely have significant equity in your home, even if prices drop significantly.
This Is because most neighborhoods saw anywhere from 25-40% value increases in only 24 months.
Sure this was amazing for current owners but we all knew this roller coaster had to take a turn. Homeowners who may be at risk of being underwater are those who bought at the tail-end of the rising market in early 2022.
The one thing to consider is that most people buying a home plan on staying there for quite some time and their interest rate is fixed…so if values drop before rising again, most homeowners are ok with that.
The REAL DANGER —-
The real danger comes when people look to make a quick profit on a property and get caught with holding costs, rehab costs, and most importantly the time this takes to turn the property over and sell it.
In those months of prepping the most for market, values are declining and their margins get thinner and thinner.
They can end up dropping the price significantly just to sell it, take a loss on the property….or abandon the project altogether.
MOVING FORWARD —–
If you can find a home you love in the right neighborhood at a comfortable price (monthly payments are manageable), then I don’t see anything holding you back. Interest rates drop in the future? Great, take advantage of it and refinance.