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Proprietary Data Insights Top Real Estate Services Stock Searches This Month
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Divorces Are Finally Being Finalized
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Buyers and sellers are learning to live with uncertainty. They’ve realized no one has a crystal ball that can predict exactly when mortgage rates will fall back to 5%, so they’re making moves now because they can only wait so long to be near their grandkids, live in an RV like they’ve always dreamt of or finalize their divorce. That’s a quote from a Las Vegas real estate agent, quoted in a Redfin (RDFN) housing market analysis that caught The Juice’s eye. Finalize their divorce. That’s the quote of the week for sure. And part of larger proof that our housing prediction for 2024 absolutely will come true. The data — and experts — continue to fall in line. These predictions of lower prices have little basis in reality on the ground or human consumer behavior. As we noted more than two weeks ago now in The Experts Are Dead Wrong: These lower rates will bring some prospective homebuyers currently sitting on the sidelines into the market. This alone might be enough to, at the very least, keep prices steady. However, if we keep seeing these national increases, even as the so-called experts predict decreases in 2024, these same people might think their time for a deal is limited. When we wrote that, we said the rate on a 30-year mortgage was finally closer to 7 than 8. Now, we can say it’s closer to 6.5 than 7. It’s all happening faster than even we expected. And it’s going to keep on happening. What’s it? Real life in reaction to small changes in the housing market. Like that agent told Redfin, people are waiting to do shit. Important shit. Deal with the house so you can get divorced. Get away from that jerk of a neighbor. Move to a bigger place or a better neighborhood with better schools and less crime. The list is literally endless. Even if a, say, 6.6% interest rate isn’t attractive to everyone, it’ll be attractive to enough people to pull them off of the sidelines and, at the very least, keep prices steady. When people want to do something bad enough, they’ll pay a financial premium. If their target was 5.5%, they might convince themselves to take the jump at 6.5%. You get the picture. So, the lower the rates go, the more people who — exponentially — come off of the sidelines. They’ll drive this housing market beyond crazy in 2024. We don’t think anybody is prepared for or has predicted (cough, cough!) what’s about to happen. Record prices and the return of bidding wars in 2024. According to Redfin, here’s how the recent improvement in rates has impacted the housing market:
And all of this is not including reaction to the December plunge in mortgage rates from the 7s to the 6s on the 30-year. As Redfin noted, and we’ve been saying for months, savings of a couple to a few hundred dollars on that monthly mortgage payment is enough for some people to move. Literally. The Bottom Line: It’s the one thing we don’t consider enough in relation to money, be it the stock market or housing. Psychology. Emotion. How people want things and will do what they have to do to get them when, in their mind, the time is right. Their target has been hit. All of the predictions of lower prices in 2024 — that we know of — don’t take into account people stretching their budgets to get what they want or to be able finally do something they’ve been wanting to do for a long time. Because it’s difficult to account for these mostly qualitative factors. We think about this stuff at The Juice — all of the time — so we have to say, if you’re planning on buying a home, you better do it now. (Of course, consult with your Mother and financial advisor first, because you do you). And, if you’re looking to sell, maybe just wait another minute until all hell breaks loose. |
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