Combining global Covid cases (how many variants are there now??) with rising inflation costs, and the nation’s “Great Resignation”, ringing in the New Year may have felt somewhat ‘meh’ this go around. Uncertainty in so many areas and fear of what’s next (at least the murder hornets came and went) are understandable outlooks, particularly when it comes to our personal financial stability. However, one bright spot economically that continues to shine in the U.S. is real estate. How can you take advantage of the residential real estate market in 2022 for a win?
- Buyers– If you didn’t move forward in 2021 in the purchase of your new or next home for whatever reason, now is a great time to make it happen. The unprecedented low housing inventory from last year, in both resale and new construction, remains on trend for this year but for motivated buyers with proper expectations, this will not be a hindrance.
Home prices are still rising but not as meteorically fast for resales (new construction has the disadvantage of continued labor shortages as well as supply costs). According to the Atlanta Realtor Association, 2021 saw a whopping increase of 21.6% compared to 2020 but experts are a bit more bullish for 2022 after first quarter. According to predictions, prices should start to slow down and normalize. And yes, interest rates are creeping up but they are still just around 4%, historically low, and with lower interest rates comes more buying power.
However if inflation continues to trend upwards, mortgage interest rates will probably follow suit. If you continue to delay, you may strongly regret missing out. But if you act and buy that home you’ve dreamed about this year, you will benefit from the primary wealth building method in the U.S. economy, home ownership.
- Sellers– I’m just going to copy and paste what I wrote above because it’s staggering…according to the Atlanta Realtor Association, 2021 saw a whopping increase of 21.6% compared to 2020. “Much of what drove high price growth (in 2021) will follow us into next year,” says Nicole Bachaud, an economist at Zillow. “We will expect to see prices rising at extremely high levels for the first few months of 2022 before beginning to taper off towards more normal levels.” Even with new construction competing for buyers, the seller’s market will remain extremely robust due to the fact that there just isn’t enough inventory compared to the demand.
If your home is in a somewhat desirable location and anywhere close to move in ready, the more likely you will still garner multiple offers quickly. According to Forbes, most experts say housing demand will stay strong in 2022 unless inflation continues to outrun wages at the current feverish pace, which could stall buyer appetite. Increased competition will also depend on the trajectory of the pandemic as more sellers will be willing to list their homes as daily life adjusts to the new normal.
If you wish to take advantage of homes currently being scarce coupled with a plethora of ready, willing and able buyers, now is the time to list for the greatest financial reward.
- Homeowners- If you are already taking advantage of the wealth building principles of homeownership and have lived in your home for a number of years, you may want to consider talking to a lender and refinancing to get a lower interest rate and lower your monthly payment and/or cashing out some of the equity you have built up.
Leveraging your home value to work for you is one of the primary benefits of being a homeowner. Perhaps 2022 is the year you add the pool or finish the basement you have always wanted, or use the money as a down payment on an investment property to start building your real estate portfolio.
My hope is that if the time is right, you can make one of the above options in real estate work for you in a big way! If you need help with buying or selling, it would be our privilege to earn your business. Or if you are looking for a qualified lender or contractor to make your home improvements a reality, check out our preferred vendor tab on our website at www.themeridianway.com.
May 2022 be a year of increase and prosperity for you and your loved ones.
By Holly A. Morris, Realtor
The Meridian Real Estate Group