NAR President, Tom Salomone, discussed the future of real estate with Nerd Wallet in a recent interview. He stated that there seems to be a clear road ahead that is balanced and fair for buyers and sellers, but it will take some time to get there.
Salomone stated, “We don’t want these big peaks and valleys we’ve seen since the downturn. Steady, sustainable growth is what we’re after. This statement is in keeping with the NAR’s philosophy that affordability will remain a top concern.
It sounds good, but is it?
It’s easy to say “don’t panic,” but for a lot of Realtors®, stress of the unknown can be difficult. We are not trying to minimize those feelings. We want to say, don’t give up.
As Salomone notes, the sky is not falling. The situation is not so dire that panic is imminent. We believe that agents should begin or continue to save as much as possible, as some have been predicting that harder times could be on the horizon.
If you have been in the business for a while, however, you know this has happened before.
Keller Williams founder, Gary Keller believes that you should be cautiously optimistic about the situation. Keep yourself and your finances in mind, but it is not so bad that everyone needs to abandon ship.
Good news, bad news
For consumers, things are starting to look up: Salomone specifically pointed out the lower interest rates, low down payment programs, additional job creation in the broader economy, and lower mortgage insurance premiums from the Federal Housing Administration. These are certainly the bright spots, but Salomone urges caution as well. He states that high rent and student debt still remain impediments to saving for a down payment. There is also the issue of rising home prices in some areas.
Current homeowners in many markets may see their home value continue to rise. This is largely due to the incentive to “trade up.” As current homeowners build equity, the incentive to “trade up” for a bigger home will increase.
This will also create openings for potential new homeowners. However, as prices rise, unfortunately, so do the costs.
Even if price growth continues at a moderate pace in 2016, this could continue to pose an ongoing challenge for buyers and Realtors® trying to find their clients affordable housing.
What Can You Take Away from This?
While we have come a long way since the downturn, some areas still have a way to go before they completely recover. A sustainable market, that is fair for both buyers and sellers, seems to be on the horizon, but no one knows exactly how long it will take to get there.
For now, our best advice is to save what you can, keep your ear to the ground, and don’t give up on an industry that you’ve invested so much time and effort in.