The rise of interest rates, along with the past few years of huge property appreciation, have caused homes to be a lot less attainable for many buyers. For a lot of us (and maybe this is you), buying a home seems way out of reach. Inflation is causing rising rents, rising food and gas prices, rising debt, and rising everything else, it seems.

But as the old saying goes, “The only thing constant in this world is change.” Well, the big change so many of us are seeing right now (in real estate) are falling home prices. It seems like everyday the financial news outlets are reporting something about how home prices are dropping all around us (in some places by 20%-40%), and they are talking about how this trend is likely to continue for some time. In fact, some real estate information outlets are predicting a 50% decline in certain markets. As expected, this is because would-be homebuyers have been putting things on pause (also as expected), hoping for cheaper prices and lower rates. The result of this is that homes are sitting on the market longer and sellers are having to lower their asking prices. As it stands, it seems likely that this trend will continue into 2023 (and maybe even 2024, depending on how things play out next year). What this means of course is that demand is falling. And what happens when demand falls for a particular product or service? You got that right. Supply increases! And of course, what happens when the supply of a given product or service increases dramatically (in general)? I don’t even need to type it out. You know the answer already.

If I was a potential homebuyer right now I would not be sitting on the sidelines waiting it out. I would be getting ready to buy. I would be doing my homework by learning my market (or the market I want to buy in), reviewing active listings every day, improving my credit score, saving for a down payment, and talking to my mortgage broker about getting pre-approved so that when the right deal comes along…BAM! Home prices are falling now but that will not last forever, and since no one has a crystal ball to know the future, trying to guess when the “bottom” of the market has happened is, in my view, a mistake.

Secondly, even though there are a lot of “Doomers & Gloomers” out there I have not seen any sufficient evidence to indicate that everything (meaning the entire economy) is going to crash around us (or that we should all become doomsday preppers). On the contrary, in all likelihood the next 10 years are going to be pretty similar to certain 10 year timespans we have seen in the last 50-70 years of American history. I mean, don’t take my word for it. I’m just a layman with a philosophy degree and a mortgage loan license but every expert I’m reading or listening to is saying something similar (i.e. – that the doomsday crowd are mistaken – out of line with the data – and that we will experience some pain in the economy but we are highly likely to recover, just like in past times when tons of people were shouting the proverbial “the sky is falling” from the rooftops but later quietly exited the conversation when reality showed their error).

America still has the strongest economy in the world. So if you are someone who is hoping for a crash, don’t hold your breath. My father used to always say, “Study the pros and you can be a pro.” This quote seems quite appropriate here. What are the pros doing right now? What are they saying? How are they investing? More importantly, how are they thinking? Are top financial advisors and real estate investors on the sidelines? The answer to that question is a resounding NO. Instead, they are doing the work so that they can be prepared to buy the next great deal that comes along. I think we should too.