ATLANTA - The predictions of real estate doom and gloom are like a rash all over the Internet. As a direct result of the COVID-19 pandemic, all home values will drop to near zero and our economy will fold like a deck of cards.
It’s a fairly toxic forecast, but it's certainly one that draws attention. So, should you be worried about the value of your home? FOX 5 real estate expert John Adams says he's sure that we aren't heading into the worst collapse of housing prices since the Great Depresson..
Adams has been a real estate broker and investor in the metro Atlanta marketplace for over four decades. And one theme he says that tends to repeat itself is the doomsday scenario for home values. It's the prediction, based on smoke and mirrors, that the value of your home will suffer a catastrophic decline from which it can never recover, and that we are all going to be ruined.
These predictions come along every few years, and all Adams can determine is that people prefer to hear bad news, saying there is something exciting about being in an economic disaster from which mankind may never recover.
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But when it comes to housing, all Adams can offer today is good news, at least for owners and those hoping to buy:
First, the market trends in the first quarter of 2021 has shown that home buyers will face a competitive spring season as inventory remains low. The increasing demand has led buyers to almost frantically bid up the prices of the few available listing, sending home prices soaring. So who’s buying?
Many employees who have worked remotely have emerged from COVID-19 unscathed. Some have actually added to their savings while reaping the benefits of higher stock prices.
Second, demand is being fueled by historically low interest rates, which are intentionally being kept low by the Federal Reserve Bank in its effort to keep the economic recovery fueled.
Third, the economy is showing signs of a strong recovery. While unemployment being around 6.9% is not particularly good, it's a dramatic improvement from this time last year when rates skyrocketed to 15% due to the pandemic. And businesses large and small are making noises about getting back to work. Home values rose about 10% in the past year, and Adams predicts they will do that again in the year to come.
Finally, today’s market is fundamentally different from conditions in 2007 when the housing bubble burst and prices fell off a cliff. That crisis was caused by bad government policy and negligent lending practices. The only problem we are facing today is a supply shortage, and that just means we need more homes than builders are building.
As we approach spring and summer, Adams expects more builders to start building more homes than we have seen in recent years. The market is currently flooded with millennial homebuyers, who have finally made up their minds to own instead of rent.
While we still face economic and health challenges ahead, it is most likely that the nation will continue to recover from this pandemic and an improving economy will continue to prop up the housing market competition. Adams believes the housing market will remain strong and will break more records through the end of this year.
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