What's going on in the real estate market today?
article  Weve all heard about the red-hot real estate market, with listings drawing multiple offers during the first week of offering. On top of that, rent is soaring and now the Secretary of the Treasury has admitted that inflation appears to be on the horizon. FOX 5 real estate expert John Adams, who, in full disclosure, is himself a landlord, shares the five things you need to know about the real estate market right now. 1. Rents are up everywhere - everything is screaming inflation. One of the important effects of the pandemic is that many Americans were able to save up cash that they might otherwise have frittered away, and are ending the period flush with cash. In addition, many buyers are tapping into the Bank of Mom & Dad for their down payments. And yes, it feels like almost all prices are headed upward, but the Federal Reserve has said again and again it has no intention of raising home loan rates anytime in the near future. 2. According to the S&P Case-Shiller Index, home prices in the 28 county Atlanta metro area are up 17% from March 2020 when the pandemic began through March of this year. As in rentals, supply is low, demand is high, and weve talked about how an annual appreciation at that level is simply unsustainable. That being said, there is simply no evidence that housing prices are in any danger of falling anytime soon. 3. It's all about affordability - at 3.25% on a 30 year fixed rate, its cheaper to buy. And many buyers are opting for the bargain of bargains - a 15 year fixed rate loan - that clocks in at an astonishing 2.375%. Many buyers feel that they cant afford to NOT buy, almost regardless of price. For decades, smart sellers have known that the overall price is not the issue. Instead, its the amount of the monthly payment that matters most to buyers. 4. Mom & Pop investors are selling their existing rental properties for top dollar rather than fixing up and re-renting. Small-time landlords who own 10 units or less account for about half of Americas rental inventory. And its these Mom & Pop landlords whove been hit hardest by the Centers for Disease Control and Prevention's eviction ban. Adams personally believe that real estate is one of the best investments most people ever make, but when you are legally responsible for all the expenses, and you are legally prevented from collecting rent, a lot of owners have decided to see at todays high prices. 5. Fears of a housing bubble are still unfounded. The housing market correction from 2006 to 2008 was caused by the collapse of the subprime mortgage industry and the desire of the government regulators to relax underwriting guidelines for those who previously been unable to obtain loan approval. In contrast, foreclosures today are almost non-existent, and even distressed owners can sell their homes quickly for top dollar. Furthermore, the average owner today has a much higher level of equity (skin in the game) than owners did in 2006. The bottom line is the economy is roaring back in a strong way. And its going to get better over the next year or two. But theres a massive housing shortage in America right now. And the solution to Americas housing supply is simple: Builders must build more houses. And after years of sitting on the sidelines, builders are finally getting back in the game. WATCH: FOX 5 Atlanta live news coverage  _____  Sign up for FOX 5 email alerts  Advertisement  Download the FOX 5 Atlanta app for breaking news and weather alerts.