Posted by Gregory Damis - CNHS on
Aug 16, 2022
in
News
We know the news surrounding the real estate market lately has been a bit baffling, and maybe a bit scary. We want to help you make sense of it. Here are some highlights from a recent New York Times article.
Rising mortgage rates this spring put a damper on people’s buying power, even though rates around 5% are historically still fairly low (see the chart below for context).
Bidding wars became not as frequent of an occurrence.
Mortgage applications were down 24%, and pending sales fell 13% from the same time a year earlier, the largest drop since May 2020, according to Redfin.
Inventory is still low (it increased by almost 19% in June over a year ago), and there are more people who want homes than there are homes available.
So, what to expect going forward?
Prices are unlikely to drastically drop. Realtor.com is projecting a modest 6.6% price increase for 2022.
It’s still a seller’s market. In May, the median price of a home in the United States passed $400,000 for the first time, according to the National Association of Realtors.
The low rates of 2020 and 2021 weren’t entirely positive. They helped home prices spiral. Soon, buyers may be in a better position than they have been in a while.
The market could return to one that resembles a prepandemic normal, with homes that take a few months to sell and prices that gradually increase. Buyers may be able to start making a few reasonable demands — for things like appraisals, inspections and mortgage contingencies.
Sellers should adjust expectations. Your home may sit on the market for a few weeks and, if priced well, sell for around the asking price — which is still a good situation.
Those planning to sell in the next year would be better off doing it sooner rather than later. But if you can wait until the market settles into a new rhythm, you may have a better sense of what to expect.
If you sell now and plan to buy, you may be trading a low mortgage rate for a higher one.
Of course, each person’s situation is different. Give me a call or email me back to talk about your specific needs. We’ll help you get there. We’re here for you in all kinds of markets.