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The Beginning of the Beginning

Mark’s Market Update – 3/30/2023

Don’t miss this amazing opportunity or “Why there won’t be a housing crash” Or “The Beginning of the Beginning”​

It’s supply and demand. Nationwide (and here in Austin), there simply aren’t enough homes.

Home price appreciation may have stalled out (and with some homes or areas – decreased because they were simply overpriced, to begin with) – but that happened not because of over-supply, but rather, “temporary under-demand”.

Let me explain:

In housing – demand is driven by the price of the home, supply of financing, the price of financing (rates) plus consumer confidence (or fear). Since inflation drove interest rates up – the perceived cost of the home (the payment) increased. As a result, a lot of people exited the market:

1. Those who simply can’t afford rates above 3 or 4% simply exited the market altogether (they won’t be coming back).
2. Those who could afford to buy a home with rates above 4% or 5% – put a hold on their home search.
3. There was a “fear” component: Some people were just worried.
In other words – you have two different types of demand:

​Those who are ABLE to buy

Those who are WILLING to buy

Here’s the thing: The ABLE TO BUY people are still out there…waiting.

True over-supply is when there are, simply, too many homes for sale for the number of willing and able buyers. In a normal market – this would result in a price bubble and a crash. In our market today, true demand is being temporarily driven down because of three factors (and why they drove demand down): higher rates, perceived high prices, and timing.

We don’t have an over-supply – we have temporary under-demand – and that’s a very, very different issue. If one of those three factors above shifts (rates), the market will change. If two of those things shift (rates and timing), the market will really change. The third thing (prices) probably won’t change.

We don’t have an over-supply. We have temporary under-demand. People are ABLE to buy exited the market and have been waiting on the sidelines…waiting for their opportunity.

So – will we see a housing crash? No. Now that the Fed is taking a “let’s watch everything/slow down “approach” – I expect mortgage rates to stabilize and expect them to start dropping sometime between April and May.

When they do – suddenly, the market will shift (if it hasn’t already started)…and it will be game on again. Don’t let the rate be the difference between paying $5,000 extra for a home versus $25,000 extra.

​I will help cut through the noise and chatter. Rely on the experts to help people buy homes and understand the opportunities that exist…right now…

Don’t miss the opportunity.