Although home values have been skyrocketing at a record pace, eating into affordability, the housing market is not going to cool anytime soon.
Housing Will Remain HotThe Expected Market Time has remained at unprecedented low levels and will -not budge much for the remainder of the year.
Everybody looks forward to the Super Bowl. It is not just the excitement surrounding championship football, or the extravagant, over-the-top television commercials, or getting together with family and friends to enjoy the game. It is also about the bountiful feast, the plethora of food options. Hamburgers, hot dogs, chicken wings, several varieties of chips, nachos, chili-cheese dip, spinach-artichoke dip, cheese, crackers, nuts, pretzels, beer, soda, brownies, cookies, candy, and so much more. By the second half of the game, it gets harder and harder to dip just one more corn chip into the chili-cheese dip. It is an unhealthy pace in eating for one afternoon per year.
Similarly, with market time at unprecedented low levels, home values are shooting skyward, eroding home affordability at an unhealthy pace. Yet, it has been going strong since July of last year and will not slow for the rest of the year and into 2022. It is great to be a homeowner, but for those aspiring to own a home sometime in the future, the goal is getting harder and harder to reach, and, for some, out of reach.
Soaring home values is not healthy and ultimately will limit the number of buyers able to purchase. While affordability is not yet an issue due to record low rates (affordability factors prices, rates, and incomes), eventually values in Orange County will climb to a point where the housing market will slow as more and more buyers stop their search due to monthly payments that are just out of reach. When that occurs depends upon how high values climb, any eventual rise in rates, and the limits to rising incomes. For now, it is not an issue, and the current pace will not change for the rest of 2021.