Remember just a few short years ago, when buyers had many options to choose from when looking for a house? And then, after looking at all those options, buyers had time then to get prequalified and make an offer below asking price. Ahh, those were days for buying… After 2020, however, the housing market has a lot of buyers stressed, frustrated, overwhelmed, and burnt out. It is a great time to be a seller! With multiple offers, low inventory, and things like escalation clauses to win over asking price and appraisal gaps to pay the difference if the house does not appraise, buyers are left with the short end of the deal and having to miss out on many dream homes. Yes, 2020-2021 housing market has been like something we haven’t seen before in years- maybe ever! But as 2022 is just around the corner, there are many home buyers sitting back wondering a lot of things about what the market is going to do next. Will is crash? Stay the same? Level out? Explode!? All seems likely these days. The experts in real estate, however, are saying NO to a crash.
In 2020 and 2021, the biggest motive for the boom was the fact that interest rates reached an all-time low, some reaching in the 1%’s. Because of that, many people who could not afford a home before, suddenly could! AKA:however, more competition. With 2022 in our sights, experts say that although interest rates have increased, and to a still very low rate, they are projected to continue to stay low. Also, with the holidays coming and the slight rise in interest rates, sales have slightly slowed down, but not to any scary level, yet to a more balanced level instead. This is great news!
Throughout 2020 and 2021, a lot of house production slowed down as well and with a sudden high demand for them, it resulted in that increase in home prices and values that we are boggled over today. Although many are worried this would lead to another 2008 kind of crash, there are not many factors with this market that would lead to that. Instead, as home productions increase and more inventory starts to grow, increase in price appreciation will start to slow. Experts do not say that homes will decrease in value though, even with the fact that we will see some more homes that were in forbearance and might have to foreclose. This should just lead to more leveling out of the market.
As we all know by now, anything can happen after what we all went through the past 2 years. However, real estate experts are predicting a steadier market next year. Interest rates are to continue to be low, not as low as they once got, but still extremely reasonable and home supply should pick up.
All this means is, it is still a great time to buy and sell real estate!