Date of publication: 06/14/2022
With various indicators and fluctuations emerging in the real estate market, is it time to consider that it might be cooling down? Although the value of homes are still generally rising, they're not increasing on a monthly basis as they have been over the past few years, and in certain cities, are actually expected to drop1. However, overall inflation coupled with mortgage rates surging beyond 5%, causing a sharp increase in monthly payments, has resulted in numerous buyers deciding to hold off from purchasing properties. Indeed, housing inventory levels, which plummeted during the pandemic housing boom, have begun to climb again rising substantially in March2.
Alongside market indicators pointing towards a decelerating housing market, expect to see an increase in home buyers filing various types of claims against their real estate agents. Even though agents may not be at fault, a number of buyers will feel like they've made a bad decision and are upset at being part of the, "last batch," of movers before the recent market shakeups started to develop. From purchasing a home for $1,000,000 and seeing it's value drop down to $800,000 soon after, to suddenly being annoyed by minor inconveniences in their new home that may have been previously ignored, many will be directing their frustration at their agents potentially looking to sue them.
When the market turns as it is starting to, it's vital that your real estate clients have quality E&O coverage in place with a strong and stable insurer who has experience of drastic market changes and the expertise to know how to respond and be there when it matters most.
While other providers come and go from the market, Victor is a partner you can count on today and for years to come.
For more information, email realestate.us@victorinsurance.com or connect with your business development contact.
[1] https://www.nasdaq.com/articles/housing-prices-are-expected-to-drop-in-these-cities-is-yours-one-of-them
[2] https://www.zillow.com/research/a-change-in-the-wind-higher-mortgage-rates-inventory-rebound-could-be-first-steps-toward-a-more-balanced-market-march-2022-market-report-30970/