Housing Will Remain Hot

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Real Estate

The unprecedented low market time plus home values shooting skyward is eroding home affordability at an unhealthy pace. Yet, it has been going strong since July of last year and will not slow for the rest of the year and into 2022. It is great to be a homeowner, but for those aspiring to own a home sometime in the future, the goal is getting harder and harder to reach, and, for some, out of reach.

It is important to clear the air and explain that just because housing is appreciating at an unhealthy rate, it does not mean that a bubble is inflating or that housing will inevitably crash. There is absolutely nothing in the charts and data that statistically support that conclusion. Instead, housing is becoming unattainable for more and more first-time homebuyers and renters. 

In looking at the Expected Market Time (the amount of time between hammering in the FOR-SALE sign to opening escrow), it has remained below 45-days since the end of July 2020. Anything below 45-days indicates an insane, scorching hot housing market where buyers are tripping over themselves to be the first to see a home that just hit the market, multiple offers is the norm, and homes are selling above their list prices. Today’s 28-day Expected Market Time is far below that 45-day threshold; the lower the market time, the hotter the market. Housing will remain hot because the supply crisis will continue into 2022 and the historically low mortgage rate environment is not going to fade away anytime soon.

Soaring home values is not healthy and ultimately will limit the number of buyers able to purchase. While affordability is not yet an issue due to record low rates (affordability factors prices, rates, and incomes), eventually values in Orange County will climb to a point where the housing market will slow as more and more buyers stop their search due to monthly payments that are just out of reach. When that occurs depends upon how high values climb, any eventual rise in rates, and the limits to rising incomes. For now, it is not an issue, and the current pace will not change for the rest of 2021.

   

 

We had to say goodbye to our beloved Labrador, Bentley last month. He was with us for almost 15 years and his passing left a noticeable hole in our family. But as I often try to find the silver lining, there is a positive change that has been the result of losing Bentley. Our other lab, Jessie, has embarked on a new adventure. Since she no longer has a buddy at home, she’s become a new companion for my life on the road. She accompanies me on quick work errands and when Aaron and I grab a bite to eat we have shifted the focus to restaurants with patios so she can come along.  Jessie is now more spoiled than ever! It’s been a healing experience for all of us to form a new bond in the absence of Bentley.

Gray has been having a moment — ahem, more of a decade, actually. 

For the past several years, the cool neutral has reigned as the color king of Pinterest, HGTV, and countless design blogs. But some experts believe gray’s days are numbered, soon to be replaced by a return to warmer and brighter colors. Whether you’re considering going gray for your next project or wondering if it’s time to swap out your existing gray paint for the next on-trend color, click here for some expert guidance.