Is the Frisco, Texas real estate market broken?

It's an interesting question, isn't it?

When you look at all of the predictions that were made at the end of last year, things haven't exactly played out as expected.

Why is that?

I came across a great article in Business Insider Magazine recently that discusses whether the Feds actions have actually broken the real estate market. Watch the following video, or continue reading below, to learn more;

As mentioned above, the real estate market in 2023 hasn’t turned out like the experts predicted at the end of 2022. We haven’t seen a rise in defaults, prices haven’t crashed, and talk of a bubble has all but disappeared.

The real estate market almost seems stuck or in a state of limbo.

Mohamed El-Arian, the top economic advisor for Allianz, believes the Feds’ aggressive rate hikes to combat inflation might have actually broken the housing market by crimping both supply and demand.

Prospective buyers have been priced out due to the high costs of borrowing while existing homeowners have been discouraged from listing their homes for sale as there is no real motivation to trade a 3% mortgage for a 7% one.

The one advantage we have here in the Frisco area is a large supply of new construction homes. The builders continue to build and are offering discounted fixed-rate mortgages as an incentive for buyers to buy.

Click Here to See New Construction Homes For Sale

Mohamed believes, and I tend to agree, that we will not see the housing market start moving again until mortgage rates come down in a meaningful way. The general consensus seems to be that rates need to come down to between 5% and 5.5%.

That rate will be low enough to encourage existing homeowners to put their homes on the market while increasing affordability for those buyers who have been frozen out in the past year.

Do you agree?

Let me know your thoughts in the comments below.

If you have questions about the current market or would like to know when a good time for you to consider buying or selling a home would be, let’s Schedule a Call.