Reply to Have prices the last month jumped the shark?

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Reply to "Have prices the last month jumped the shark?"

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[quote=Anonymous][quote=Anonymous]Probably not a popular opinion, but I really do think these prices are going to stick. Inventory in this area is exceptionally low and demand has always been strong. The difference now is that the people shopping for SFHs aren’t just the people who always wanted to live in the suburbs. Now you  have all the formerly happy urban condo dwellers who have decided that, if they don’t need to commute 5 days a week downtown anymore, they want the space a SFH in the ‘burbs provides. As the pandemic comes to a close, I think there are a lot of people who have realized that they still need to stay close to DC but don’t necessarily need to be downtown or in Arlington anymore. So they are taking their 2 six figure salaries, their extremely low mortgage rates, and their stock market gains and the are shopping in areas that never really had that kind of attention before. As expensive as this area is, many 2-professional families are still paying what is considered an “affordable” monthly payment relative to income. [/quote]

I'm a hard money lender active in the market.  Prices can stick, maybe, if rates stay where they are.  I say maybe because I've started to see people buy houses like they buy toilet paper, driven by panic, which is never sustainable.  There's also a ton of stimulus money still active.  The direct checks were inconsequential but I have clients who received millions in PPP loans (and similar support) whose businesses are still headed for insolvency in the next year or two.

If rates rise even 1%, affordability starts to fall off a cliff.  People have short memories.

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