For a long time now (throughout 2021 and well into 2022) the real estate market has been a Seller’s market. Prices were sky high and rates were continually rising. But now, in mid-2022, the real estate market is once again beginning to shift.
If you’re wondering what is happening to the market right now and how it’s trending, keep reading. We’ll cover recent changes and clarify where the market stands today.
- Home Availability Is Still Limited
Real estate prices rose during the pandemic when the demand outpaced the supply. Today, there remains a lack of inventory which keeps prices high.
Compared to years past, there has been a decline in the number of sellers listing their homes on the market. This impacts buyers as buyers need to act very quickly in making an offer on a home. Also, buyers don’t have the luxury of being as particular as they have in the past. They may need to forego some of the items they want their home to have in order to be decisive and act quickly.
This trend is changing a bit though with mortgage rates on the rise. Not as many buyers are looking to purchase and not as many sellers are looking to list as they know they will eventually need to buy.
- Home Prices Are Still Increasing
Home prices rapidly increased in 2021. Although still growing, prices are currently increasing at a slower rate than they were in 2021.
- Mortgage Rates Are “High”
You’ve likely heard complaints recently about how high mortgage rates are. But, while they may be higher than last year, they’re still historically low!
Even with mortgage rates close to 6% for a 30-year fixed loan, this is still well below where mortgage rates have been in years past. Experts expect that interest rates will continue to increase for the foreseeable future.
- Fewer Contingencies
In 2021, “As-Is” deals were the norm and appraisal waivers were frequent. This means that buyers didn’t ask for any repairs to be made and chose to forgo seeking a price reduction if the property did not appraise at list price. Buyers had little negotiating power because the real estate market heavily favored sellers.
But today, in mid-2022, this is not happening nearly as much. Since buyers have a little more power right now, buyers are not being forced to purchase “As-Is” and can ask sellers to decrease the purchase price if the property does not appraise at the purchase price.
Questions About Real Estate?
The real estate market is in constant flux. This can make the prospect of selling or purchasing property feel daunting.
If you or anyone you know is looking to sell or purchase and you have questions about the real estate market, please do not hesitate to reach out to us. We offer free consultations and would be happy to talk you through your situation.
