Saturday, May 6, 2023 / by Nick Waldner
Two words that I've been hearing more often in recent months are recession and inflation. Let's dive in and understand exactly what they mean for the real estate market.
Simply put, a recession is a period of economic decline when the economy is slowing down. We have just gone through a period of great economic growth and things have really ramped up, but now, we're starting to see a decline. So how does this affect our market?
First, it decreases consumer optimism. The number of buyers who have faith in the stock market, job security, and the future outlook will begin to decline due to the fear of a recession. This begs the question, should you buy or sell during a recession? It depends on why you're buying or selling. Your decision to buy or sell is not just about the numbers; it’s about what’s happening in your life. Reach out to me if you want to discuss if moving makes sense for you right now.
Here's what I can tell you about the market: If you're looking to sell, you can still get top dollar, and we don't see that changing in the near future. I think the market is going to be pretty flat for the next one to two years. For buyers, right now is a great time because the number of competitors in the market has decreased. As a seller, there are still plenty of buyers to go around, and as a buyer, you might only compete with one or two offers, or maybe none at all.
The second question I often hear is, what about inflation? Essentially, inflation is an increase in the prices of things that we buy every day, such as gas, milk, or bread. It's the fall in the purchasing value of our money. In other words, $100 in the bank today is worth less than $100 in the bank 30 years ago. As prices increase, people tend to pull back, especially with luxury goods. Fewer people are buying when it comes to building homes because things are more expensive, such as lumber and other building materials.
If you have questions about today’s topic or anything else, please call or email me. I am always willing to help!