Covid threw a wrench in everything from our social lives to the way we purchase household goods and especially how we work. With remote work being more prominent, it’s no longer necessary to live close to work and with this newfound freedom, more people are turning to live out of the city and in their own homes in the suburbs.
No forecast is perfect, but we’d like to give you a few ideas of where we think the market is headed in this new year. Here are four predictions for you to think about as you prepare to buy or sell your home.
Young Buyers Will Have A Tough Time
There are many variables that feed this prediction but the price of homes is a big one. There’s been a tenfold increase in the cost of homes which puts tremendous pressure on the millennials purchasing new homes that their parents and grandparents didn’t have.
In addition to the cost of homes, baby boomers are living longer and staying in their homes longer. This drives the inventory down and puts the pressure of scarcity on the price of homes available, further adding to the cost issue faced by young home buyers.
With continued pressure on home prices, and inflation erasing raises, it’s difficult for most to make a move on a home without financial help from family members.
Prices Aren’t Going Down Anytime Soon
With the lack of inventory comes the issue of higher prices. It’s a seller’s market right now and there’s not much indication this will change. With 100s of bids on some homes in California, sellers will pick and choose the offers they prefer. There’s a good chance that prices will continue to rise and will leave those looking to make a move wondering if they have a chance at all.
Inventory Will Be An Issue
The market continues to be scarce and this will drive prices up, and continue to make it competitive for buyers everywhere. The truth is, going into COVID, the housing market was short on inventory. Since COVID, the number of listings has shrunk to an all-time low.
The inventory issues will continue to be an issue through the extended labor shortage caused both by COVID and stricter immigration policy. Builders are beginning to ramp up their rate of construction once again but the effects of a ramp-up won’t be felt right away, meaning 2022 will still present an inventory issue for new home buyers.
Increasing Interest Rates
This is a blessing and a curse. The feds raising interest rates reduces speculative buyers in the market as there’s typically less money to be made. But the expense of owning a home increases as well. Either way, this additional cost will impact the budgets of home buyers as the additional interest cost will have to be factored in. With the high prices of homes now, this may discourage more than speculators to purchase homes as budgets are exceeded across the states.
We hope these predictions are helpful, but it’s important to keep in mind that they’re speculative and in the same way that COVID took us by surprise, the market can be affected by many factors. At any rate, keep your head up and keep these in mind as you look for houses this year and we hope that you find the home of your dreams!
Get more information about the ever changing housing market when you work with an exceptional licensed realtor like Susan Gregory. Susan is consistently a top agent in the state and knows how to position your listed home to move it quickly and for a great price. Call 615-207-5600 for your home buying and selling needs.