Are We Seeing a Market Correction Or Crash?

Sherry Campbell  |  October 10, 2022

Real Estate

Every week someone text or e-mails and ask me if the real estate market is crashing! Coming off
of the high of 2020 and 2021, it probably does feel like the market is crashing, but I can assure you that
we are just seeing a market correction.


If you are a buyer, I ask you to consider the following: while interest rates are almost double 
what they were one year ago today, so is the inventory. A year ago, buyers were willing to pay 10-20%
above the market value to purchase a home, yet today they are questioning whether or not they should
purchase a home at market value with higher interest rates.


We are no longer in a Seller’s market, so buyers have a better advantage in today’s market than
they did at the beginning of the year. The only word of caution is that you should avoid overpaying for
a home like buyers did in 2020 and 2021 and approach your purchase with a little more caution.


Let’s face it, everyone needs a roof over their heads, so buyers will just have to decide whether
they rent or purchase in today’s market. Think outside the box and look at financing with a 5-year ARM
at a lower interest rate and then refinance when the interest rates drop. Another option is to consider
buying down the interest rate in order to lower your monthly payment. Talk to a real estate professional
or mortgage broker for more details here.


If you are selling your home, you will need a professional to help guide you on what you will
need to do to prepare your home to sell. In 2020 and 2021, buyers purchased any home, whether it was
clean and updated or not, but as the market corrects, buyers become pickier. In today’s market, sellers
will need to spend some time and money to prepare their homes to sell if they want to capture the market
price.


The good news is that a correction is good and needed in the real estate market so that buyers
can continue to afford homes (remember even sellers will need a place to live and don’t want to
overpay). Housing markets are cyclical, just like the stock market. The market has to come down some
to level off, but it will come back up again.


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