Rants & Gems #23: Real Estate Market Update

TL;DR

The Rants & Gems #23 market update says high demand and historically low inventory are driving home prices higher, with the market reportedly 5.5 million homes short of buyer demand. The hosts cite a 20% year-over-year rise in 2021 and a projected 16% increase entering 2022, while expecting growth to begin leveling out in 2023. Read on for their views on inventory, inflation, Atlanta prices, and loan limits.

Transcript

all right guys so welcome back to another incredible episode of the number one real estate show on the planet the ransom gem show my name is matt garland nmls number 58700 but i'm better known as mg the mortgage guy and my name is kiana watson broker extraordinaire yes license number three talk to homecoming 576. and today is our day today is our d... Read More

Key Insights

• 😘 The real estate market is experiencing high demand and low inventory, causing prices to rise.
• ❓ Forecasts predict continued price increases in 2022, but a potential correction may occur in 2023.
• 🙂 Baby boomers downsizing could lead to a slight increase in inventory.
• ☠️ Waiting for a market crash may result in higher interest rates, negating any potential savings from decreased home prices.
• ☠️ Inflation plays a significant role in the real estate market, influencing prices and interest rates.
• 👪 Companies like Zillow and hedge funds are targeting single-family homes, contributing to price increases.
• ❓ Foreclosures may not be a viable option for buyers, as lenders are unlikely to foreclose quickly, and distressed properties often require significant repairs.

Questions & Answers

Q: Why were home prices rising according to Rants & Gems #23?

The hosts attribute rising prices to high buyer demand and historically low housing inventory. They say the market was 5.5 million homes short of meeting buyer demand, creating continued upward pressure on prices.

Q: Did the hosts expect a real estate market crash?

No. They say they found no market data, research, or articles supporting an imminent crash and expected prices to continue increasing.

Q: How much had home prices increased in 2021?

The episode says home prices were up 20% in 2021 compared with 2020. The hosts present this increase as evidence that the market remained strong.

Q: What did the episode forecast for home prices in 2022 and 2023?

The hosts cite a projected 16% price increase going into 2022. For 2023, they predict that prices would begin evening out rather than reversing to earlier levels.

Q: Could baby boomers downsizing improve housing inventory?

The hosts expect some baby boomers to sell their properties and move into condos or smaller homes. They say this could add inventory, especially among single-family homes, but would still not provide enough supply to meet buyer demand.

Q: What was happening in Atlanta’s housing market?

The episode gives Atlanta’s average home price as $458,000, compared with $398,000 the previous year. The hosts use that increase to illustrate how quickly prices had risen.

Q: How does inflation affect the real estate market?

The hosts describe inflation as a broad increase in prices across the economy. They connect the inflationary environment with rising home prices and interest rates.

Q: What loan limits did the hosts discuss?

They say the 2021 conventional loan limit was about $548,000 in Georgia, with amounts above that treated as jumbo mortgages. For a single-family home in a high-cost state such as New York, they say the limit could reach $822,000.

Summary & Key Takeaways

• High demand and low inventory in the real estate market are causing home prices to rise.

• The market is projected to continue its upward trend in 2022, with a possible correction in 2023.

• Baby boomers downsizing could potentially increase inventory but is not likely to meet the demand of homebuyers.