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Tuesday, September 27, 2022

Real Estate Trends to Expect This Summer 2022

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The story of the real estate market over the last two years or so is one of the wild rides and strong performance metrics—at least if you’re a seller. Buyers may have a somewhat more frustrating response to the antics of the market. Rapidly evaporating inventory, skyrocketing values, and increasingly dramatic steps required to get an offer taken seriously—from skipping inspections altogether to making cash offers over the asking price, buyers have had to take drastic action sometimes to buy a home.

The overall projection for the rest of 2022 is simple: a market that’s cooling off and perhaps even heading back into somewhat saner, calmer waters. The hallmarks of the hot market won’t vanish overnight or even within a few weeks, of course, but it does seem apparent that things are settling down somewhat.

What other real estate trends can we expect this summer? Let’s explore what some of the top agents in the country have to say.

Another Interest Rate Boost from the Fed

The Fed has already promised to raise interest rates again soon in an attempt to stave off or slow down inflation and avoid a recession. Those rates may continue to fluctuate a bit, making it somewhat easier for buyers to close on a home, but this isn’t a case where an overinflated bubble is about to burst for everyone. If anything, recent rate increases will probably begin to stabilize.

What does this mean for you if you’re a buyer? Don’t try to time the market. Rather, explore the available inventory in your chosen market and make a reasonable offer when you find a suitable property. Waiting for your mortgage interest rate to drop even further is almost guaranteed not to work out the way you expect it to!

Prices Aren’t Going to Fall Off a Cliff—Probably

The same is true of home prices. While prices may be decreasing (slowly) in some markets already, they’re probably not going to drop sharply off a cliff. If anything, costs are rising as inflation coupled with high demand and low inventory continue to put pressure on markets everywhere. Increasing rents are also working to increase housing costs and even pushing people out of the market altogether.

So the bottom line is that prices may not fall a lot, but they’ll probably stop increasing by quite so much. The end result of all that pressure has been a decrease in the total number of homes sold. That may continue or even increase if prices or interest rates (or both) continue to experience even slight increases.

Inventory Will Open Back Up

The total number of homes available for sale will probably grow, although not dramatically. Homeowners will continue to be persuaded to sell given those rising housing costs. If they have a lot of equity accumulated in their homes, the temptation to sell and realize that profit may be quite persuasive, especially given global inflation and rising costs.

This means that at least one of the factors driving potential buyers out of the market will ease up on them and perhaps entice them back in. However, as always, purchasers and sellers alike should engage based on their own careful assessment of their personal and financial circumstances. Avoid trying to ride some impossible-to-predict wave, and focus on what’s right for you.

Not a Buyer’s Market Quite Yet

While home shoppers can expect some positive developments over the next few months, it’s crucial not to let your expectations run away with you. This isn’t a buyer’s market, and it isn’t likely to be for another year or two yet. We’re still experiencing low inventory in most hot markets.

Yet it’s also true that the only real market you should be concerned with is the geographical market of the town and neighborhood you want to live in. Focus on evaluating that area and form a strong relationship with a qualified and experienced real estate agent in the area. Let your realtor be your guide through the vagaries and changing landscape of the real estate market in that area.

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