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In the recent years, home prices have skyrocketed creating a strong seller’s market. While the market is predicted to become more stable in 2022, with slower price growth and longer listing times, this year will most likely continue to be a seller’s market.
Three key predictions for this year will drive the state of the market. First, housing prices are forecasted to continue to grow nationwide by about 2% in 2022 but at a much slower pace. Housing prices aren’t predicted to drop in 2022 just yet. Second, the affordable housing shortage continues with inventory remaining low. Finally, interest rates are predicted to increase this year.
With these and other factors, 2022 will most likely not be the year of affordable homes as many buyers had hoped. This is good for sellers. According to Realtor.com, there’s no prediction for the market to transition to a buyer’s market during the next year. This means buyers may continue to struggle to find their perfect home. There appears to be no price advantage for waiting to purchase. Especially, with the shortage of affordable housing, if you find a home you love in your price range, work with your trusted real estate professional to make an offer.
2022 Predictions for Buyers
During 2021, housing inventories reached an all-time low and prices reached the highest we have seen in over 11 years. With limited inventory and low interest rates, 2021 ended with a stronger seller's market. In 2022 buyers will face many problems with affordability as interest rates are expected to rise.
While interest rates are expected to increase, the price growth will continue to slow. With no indication that prices will drop and the expectation of rates to increase buyers are encouraged not to wait to buy. If buyers are waiting for the market to drastically shift before buying, they may be waiting a long time.
How do rising interest rates negatively impact buyers? A rise in rates means that qualifying for a mortgage may be more challenging and mortgage payments will be higher. The market will continue to be tough for first time buyers. With 45% of mortgages going to millennials, the competition for inventory under $500,000 is tight. In Kent County Delaware our average price for a first-time home buyer is under $250,000 making it very challenging to find and purchase a buyer's first home.
However, buyers shouldn’t be discouraged as there are many different options for financing today. Real estate is still a smart investment. If you are looking to stay in your home for years, then it's never a bad time to buy.
2022 Predictions for Sellers
The 2022 real estate market will continue to be good for sellers; however, it's forecasted to not be as good as recent years. Housing price growth is slowing and will continue through the year. However, property values are still strong.
Sellers should still see an offer at or near the listing price. For sellers with properties valued under $500,000, the inventory across the country continues to be low at this price point. In fact, the most affordable price ranges have the smallest amount of inventory. While the high demand is a challenge for buyers, it’s great for sellers.
Now is a good time to sell property regardless of the price range. If you’re interested in selling, connect with our experienced real estate agents to position your property to receive the best outcome.
Be Patient in 2022
2022 requires patience for both buyers and sellers. For buyers in the affordable housing price range, you may have to continue to put offers on several homes before one is accepted. You also may have to purchase a home at a lower sales price as rates continue to increase. The key is to work with a real estate agent that understands the local market and will keep you informed of new inventory.
For sellers in the higher end price range, homes may have a longer listing time than in recent years. Also, your home’s value may grow more slowly and begin to level out. This requires patience so that you receive the best offer for your home.
Industry Experts with Customer Focus
At The Rivera Group of Keller Williams Realty Central Delaware, we understand the Kent County, Delaware real estate market. Our industry expertise, combined with our customer focus, offers you trusted and quality real estate guidance. Contact us today to schedule a consultation.