Real Estate Reality Check

Ivory tower syndrome is alive and well. Zillow predicts home prices to increase 4.8% over the next year 🤔 

Reminder that Zillow had to shutter their iBuying business because their pricing algorithm was so off. Also, the Zillow CEO sold his house for 40% less than its Zestimate in 2016. 

Don’t just look at the data, look as who is creating the metrics. There are plenty of individuals and entities that will feign extraordinary circumstances in order to validate a high list price… not to mention there is a 1-3 month lag in national data compared to what we see in real time as boots-on-the-ground agents.

Even more importantly, there is a difference in demand vs. DESIRE. 

Sure a lot of people desire to purchase a home in a specific market, but are their circumstances realistic? 

Actual demand is driven by realistic desire. 

There’s a lot more to unpack here, but long/short

•Mortgage rates aren’t going down any time soon. 

•Developers are not altruistic; they need to foresee ROI to start a project. Until that margin exists, single family starts will be quiet.

•Buyers need to be motivated to write a contract.

•Buyers, take advantage of fear in the market and negotiate. The ball is finally in your court.

•Don’t get stuck in a perpetual renting cycle. Rent at the bottom of your budget. 

•Focus long term.