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The real estate market has been booming for the past year and a half and real estate agents have been keeping up brilliantly! Buyers have been taking advantage of the low mortgage rates and snatching up houses with a quickness – so much so, housing inventory had trouble keeping up with demand.
Realtors have been working hard to keep pace and they have some interesting predictions regarding the future of the market. Here are five predictions regarding the 2022 housing market.
1. Higher prices make buyers think twice
Housing prices have increased steadily over the past year and half, but despite this, buyers didn’t seem to care too much. Well, that’s not the case now because as inflation is starting to set in and mortgage rates increase, folks are getting leery of the high costs. It’s such a problem that 54.4% of realtors say contracts are being terminated more often now because clients are realizing just how much they’ll be spending.
2. Improving public health leads to improved housing inventory
At the time of writing this article, 56% of Americans have been fully vaccinated, and as more become fully vaxxed, realtors believe the housing inventory will replenish. Agents report that sellers are beginning to feel safer putting their houses on the market and they’re eager to cash in while the market is still in their favor.
3. Bidding wars die down
At the end of 2020, bidding wars were happening everywhere. There are low interest rates, lots of qualified buyers and not enough houses to go around. Now, the tides are changing and buyers are seeing more homes available to purchase and sellers aren’t getting as many offers as a result of this.
4. Price volatility slows the construction of new homes
In the past, if people couldn’t find a house that won them over, there was the option to purchase a custom built home or a new construction home. You could contact a contractor and get a home built to your specifications. Easy peasy.
Today, that is still a possibility, but it’s going to be a lot more expensive. Just for the price of lumber, the cost to build a new single family home is going to be an additional $36,000! The fact of the matter is the cost of materials have skyrocketed and when you factor in the labor shortages and supply chain disruptions… Who knows if and when the prices will come back down?
5. Cash buyers are king
Housing costs have increased so much, the average person buying a house with a mortgage could run into trouble if there’s a cash buyer submitting an offer on the same house. Wondering if this can really happen? Yes, it can! For instance if an individual wishes to buy a house in the neighbourhood of Century West, Bend, Oregon (possibly after going through a list –https://bernardrealestategroup.com/century-west-bend-or/– of good neighborhood areas that have a defined living standard) with a mortgage, then there is a high chance that the deal would be scrapped. In contrast, if an individual wants to buy the same property with cash, there is a good chance that he would be able to make the purchase without any hassle.
With a mortgage buyer, there’s always a possibility that the deal could fall through due to problems with securing funding. The harsh reality is when it comes to money, sellers would much rather have cold hard cash in their hand on closing day.
The 2021 housing market is ever-changing
Whether you’re buying or selling a house, it’s always important to be mindful of what’s going on in the market – especially in your area. Today’s housing market predictions aren’t set in stone and it could change at the drop of a dime. However, when you do your research and consult real estate experts, you can prepare for those bumps that may come along the way.
We can’t say for sure that 2022 is going to continue to favor sellers nor can we say that housing prices will level off. We can tell you that if you decide to venture into the world of real estate… hire an agent as soon as possible. They will be your guiding light during this haze of economic uncertainty.
