Looking for insight / challenges to thoughts

[Edmond J Daugherty]

Hi guys,

Not trying to wear a tin hat, just have legitimate concerns and am curious if I can get insight from people more experienced than me when it comes to the current market and what may be ahead. What we're looking at:

I live in NJ and do not like the property tax situation... been looking in PA for 6 months but obviously it's crazy everywhere so sellers concessions weren't being considered (we sold our home Oct 2020 😁)

Percieved positives:

-Strong demand

-Low inventory (why has it been that way for years?)

-Increasing prices

-Low interest rates bringing higher than normal demand

-First time home buyer incentives

-In my neck of the woods a lot of people have fled NY but the bidding has been ridiculous too. (Not paying $35k over appraisal value...great for sellers)

Perceived negatives:

-Lots of people using the loan forbearance program

-Housing becoming unaffordable for first time home buyers

-When interest rates rise again prices will drop (Is there a certain percentage that starts to slow demand "normally?")

-With increased housing prices property taxes will follow

I'm sure I'm missing some things on each side of the pros/cons spectrum. Is anyone concerned about buying a house and having it drop 20% shortly after then the lender asking for catch up payments? I'm definitely interested in buying a project house but everything seems to be ridiculously overvalued in my small estimation. Can this continue for years?  I have savings but just don't want to vastly overpay for something if I don't have to

Thanks for any insight!