Episode 1 of Real Estate Radio
The current market; is the bubble going to pop?
In our premier episode of Real Estate Radio, Dustin and Kensie are joined by lender extraordinaire, Jason Lister, from AGCU Mortgage. Real Estate is one of the largest purchases you’ll make in your life, so we want to be a resource for those who are unsure of where to start or how to go about it. We’ll tackle basic topics in an attempt to make real estate less intimidating and more accessible.
The real estate market is something that is ever-changing, and the process that was once very buyer-friendly now requires a bit more forethought. With buyers moving to the area from all over the country and inventory being somewhat low, there is now an urgency and timeline to the home-buying process. Gone are the days where you can peruse listed homes, make your list of favorites, then get pre-approved and write an offer when you've had a few days to think it over. The key to navigating this market as a buyer is preparation and accurate information.
Nowadays, if you're looking to buy a home, reaching out to a lender should be your first step. Get your financial ducks in a row, choose a lender you trust, explore your loan options, and get your pre-approval letter squared away first. Once you have that integral part handled, you get to move on to the exciting part: shopping. With inventory moving pretty quickly in this market, we're no longer seeing situations where buyers have a list of 7 or 8 homes to see in a day. Instead, buyers may be lucky to see 2 homes in a day and if they find one they like, they will likely need an offer written immediately. It's also not surprising to find yourself in multiple offer situations. Because of this, that pre-approval letter is more important than ever before. The lender you're approved with is also proving to be an important detail. With so few differences between some offers, sellers are going to look at the type of financing that is best suited for the characteristics of their home, and their agent is going to encourage them to work with a reputable, local lender to ensure a better chance at a smooth transaction. Because of this, you really want to start off on the right foot by vetting lenders and finding out who comes highly recommended and who the best fit for your needs is.
Even with preparation and a clear first step, this kind of sellers market can be intimidating for buyers. It causes big questions, hesitancy, and concern over where we're headed. The question we've gotten so often during this time is: Are we in a housing bubble that's going to head into a recession? It's a complex answer, but one that eases worries nonetheless. Here in the midwest, our highs and lows tend to be less extreme than some other states which makes purchasing a home here a little easier. Generally, we have fought inflation in the past by increasing interest rates. You have to ask yourself what your dollar will get you now versus if you wait for rates to go back up to 4-4.99%. Your purchasing power right now is great in comparison, which actually makes right now a great time to buy if you're ready for it. In 2008, our house prices in the midwest only dipped 8-12%. Since then, financing guidelines have changed greatly. Years later, our inflation in the current housing market is quite tame compared to those in states such as Colorado, Seattle, Texas, taking some of the risk out. With the influx of families relocating to the Midwest, low cost of living, and low house price index, we're pretty insulated from severe market changes.
