Calm Down, My People
Updated: Feb 14, 2019
How a slowdown in a ridiculously rising house market is freaking out everyone from buyers to sellers to my favorite Starbucks barista.
My people...PLEASE STOP! I have heard "bubble" and "recession" thrown around like confetti these last few months. Mostly by well-meaning folks who see a slowdown in the market and go straight to recession-type panic. A word of advice…don’t buy a ticket to Doom & Gloom Town just yet.
We cannot predict the future but you better believe every agent worth their salt is researching the trends, tapping into the experts who have accurately predicted the market in the past and trying to interpret what their world will look like in six months. It’s not a recession. And while we are talking “recession,” let this be a friendly reminder that during the darkest days of 2008-2010, Middle TN was by and large insulated from the brunt of that nightmare. We are incredibly fortunate to be called home by some of the most sought after companies in this country which helps stabilize our local economy and market.
So…instead of bubble and recession let’s use the real word…NORMALIZATION. Repeat after me: market normalization. Meaning, inventory is rising and house prices are not climbing at an ungodly and unsustainable rate of 7% increase every year. Think about that!! 7% every year would mean that a home that cost $250,000 in 2016 is now worth $286,000 and would be worth $327,7000 by 2020. Why in the WORLD would we expect our market to continue to increase forever at those rates? If you were a young family, young professional or just out of college…would you be able to afford an “entry level” home at nearly $330,000? That, my friends, is NOT normal.
Yes, normalizing means that prices will not continue to escalate at the historical rates we have seen.
Yes, sellers may have to price more conservatively and give a little in negotiations.
Yes, we all will have to live in our home more than a year to bank thousands of dollars post commissions/closing costs.
However, when sellers turn around to buy a larger, smaller or more suitable home to move into they will be happy that the playing field has leveled a little. We return to a healthy market of normalized home inflation, more inventory and a give and take transaction on both sides. Instead of the wild wild west it will return back to a wonderful market where agent selection, home buyer preparation, and negotiation are all key components again.
Breathe deep. Exhale. Repeat.