When is the Next Crash Going to Come?

For everyone that didn’t buy during 2020-2022, there’s one major burning, hopeful question…When is this all going to crash so I can buy at a great deal?

Well, that train has passed.  Like buying bitcoin for pennies, that too is gone. Now, there are some areas throughout the US that will feel some loss in value, where the job markets can’t fix or the states that drove their citizens away due to draconian laws and bad governors.  But not everywhere. And right here in the DMV, the price is the price…and its only going to go up.

As of July 2023, our area has seen an overall 4% median increase year over year.  And with barely 1.5 months of supply, there is no end to that increase in sight. To see a crash in the market pending, we would need to be already close to a 5-6 months worth of inventory. Right now, our main factor holding up inventory is the interest rates.  As interest rates increase, the average seller is hesitant to sell their home at their super low interest rate to take on more debt at a considerably higher cost in interest rates currently hovering in the high 6’s and low 7’s. In fact, over 70% of owners have a mortgage rate lower than 4%.  And according to NAR over 76% of current buyers are reluctant to sell due to their current rate.

So until inflation numbers cool down to below 2%, and the bank follow suit by reducing interest rates, we are going to continue to see low inventory and costs to continue increasing.