Key Takeaways:

• Shifting buyer demand creates lucrative opportunities for decisive sellers
• Higher mortgage rates have set fire to this already hot housing market
• Don’t delay—now is the time to contact us and get your home on the market!

The current housing market

With a sudden jump in home listings recently, today’s hot housing market has many homeowners wondering if now is the best time to sell. Of course, trying to time the market perfectly is challenging, though if there ever was a time to sell, this is absolutely a great one. 

Everyone’s situation is different, but if you’ve been thinking about selling your home lately, contact us today to begin the process and maximize your success. 

The supply of homes for sale, explained 

Compared with last year, the supply of homes for sale jumped 9% in May, which is striking considering the historically low supply of home inventory that has defined the US housing market this year. 

As sellers rushed to put their properties onto the market and cash in their equity gains, new home listings rose nearly twice as fast as a year ago in May, while pending home sales fell by almost 4% in April. And with sales of newly built homes dropping by a much broader 16% compared with March, this marked the sixth straight month of sales declines. 

To fully appreciate this drop-off, consider that this softening in demand for housing marks the greatest slowdown on record in nearly a decade. 

Home sales are slowing because mortgage rates have risen sharply since the start of the year, with the most significant gains coming in April and early May. The average rate on the 30-year fixed mortgage started the year close to 3% and is now well over 5%, causing new home buyers to slow down a bit.

The reality of rising mortgage rates

While homeowners and homebuyers certainly enjoyed locking in 30-year fixed mortgages at the historic low of 2.68% in December 2020, this is far from the norm. It was only a few years ago, during the decade of the 2010’s, that mortgage rates averaged between 3.45% to 4.87%—not that far off from today’s average of just over 5%. 

If you step back even further in time, the absolute highest mortgage rate was a whopping 18.45% in 1981! Like today, that was due to the Federal Reserve raising the federal funds rate to combat inflation, causing mortgage rates to spike. But unlike potential homebuyers in 1981, we have good news on the horizon, as we’re seeing mortgage and refinance rates start to decline for the first time in weeks and the economy showing signs of stabilizing. 

An overdue housing market correction

If you’re still worried about the housing market, you don’t need to. The good news in these reports is that homes are still selling, and in many cases, they’re still selling above their asking price. The housing market is cooling down due to a lull in buyer demand. However, this cooldown is a much-needed correction to what has been a short-term housing market fueled by the pandemic. 

The critical difference in the market now is that with fewer buyers competing with one another over available housing, home prices rose another 21% in May, meaning equity gains are still there for homeowners. And if you’re looking to sell to downsize and lower your monthly expenses, you’ll be perfectly positioned to find your ideal home with fewer buyers competing with you in the market.

Sell Now for Your Best Return

If you’re considering selling your home, this may be the best possible time to list. With a trusted, experienced real estate team behind you, you can rest easy knowing that we’ve seen the ups and downs of the market over the years. You can always make a smart move, so contact us today to discuss your options!

Key Takeaways:

• Home values are rising faster than inflation, making homes a prized asset
• This housing market offers unique opportunities for buyers and sellers
• Contact us today to secure your assets and safeguard your future!

The state of real estate and inflation

As inflation soars to near 40-year highs and raises the cost of everything, many are looking for innovative ways to secure their assets against inflationary losses. Additionally, given the housing market’s recent volatility (primarily driven by historic low levels of housing inventory that have caused an imbalance between supply and demand), it’s understandable that many might consider real estate to be a wrong or risky move right now. But the great news is that nothing could be further from the truth. Let’s explore how and why buying or selling a home can safeguard you against inflation. 

The housing market can protect you from inflation

Real estate remains a stable area for investment and profit realization because a home’s value does not increase in relation to currency; it increases based on demand. So if you’ve been holding back from buying because of today’s market pressures, consider that inflation is up even more than mortgage interest rates, making it a smart move. Similarly, if you’re considering selling, the demand for housing has never been greater, which is terrific news for anyone looking to cash out their equity to hedge against inflation. 

Buying a home: by the numbers

Let’s take a look at some numbers. Experts estimate that Americans face an annualized inflation rate of around 15%. Considering that, the current 5% mortgage rate is a bargain for homebuyers in the short term. Moreover, you’re securing an asset that, over time, will increase. And, as you pay down your mortgage, even at 5%, your equity will continue to grow. 

Selling a home: by the numbers

It’s no secret to homeowners that their home equity values have grown over the last couple of years. According to research firm Black Knight, at the end of 2021, Americans were sitting on record-high home equity levels of approximately $9.9 million. So if you’ve noticed homes in your neighborhood selling above their listing price and you’ve been on the fence about selling yourself, now may be a good time to cash in on this opportunity.

Both buyers and sellers can make tremendous gains

In a hot housing market where home inventory is low, competition is fierce, and home equity values are at all-time highs, buyers and sellers can start to feel overwhelmed. But don’t despair: an increase in mortgage rates isn’t stopping homes from selling quickly, nor is it preventing home equities from appreciating. For example, according to the National Association of Realtors (NAR), properties remained on the market for just 17 days in March, with many going for over the asking price!

With more buyers than sellers today, current homeowners looking to sell to fight inflation have the advantage of likely bidding wars, resulting in greater profits and fast-moving homes that don’t stay on the market for very long. For those looking towards homeownership to protect their assets against inflation, reassurance comes from knowing that demand is expected to outpace supply for the foreseeable future, meaning that home equities will continue to rise. And if inflation continues, fixed-rate interest rates will drop again, creating the perfect opportunity to refinance your loan. 

Get Ready to Make Your Move

The first step to buying and selling is crunching the numbers. Our team will help you find the real, up-to-the-minute value of your home using the latest microdata and neighborhood trends. Then, we’ll work with you to figure out the best strategy to shelter your investments and assets from inflation. Contact us today!

Key Takeaways:

• The CARES Act kept homeowners in their homes with mortgage forbearance
• There’s plenty of options to help homeowners transition to repayment
• No one needs to face foreclosure – contact us today to discuss your options!

Mortgage forbearance helped homeowners

With the dust of COVID-19 settled, that means the resumption of mortgage payments for many Americans. And in a post-forbearance real estate market, it may be challenging to know the correct next step after the last couple of years. But the good news is that there’s no bad news! The CARES Act enacted by Congress allowed homeowners to postpone their monthly mortgage payments. This policy worked, because evictions have not been as severe as many feared, and the calamity of the 2008 housing market is not going to repeat itself in 2022.

The Mortgage Bankers Association estimates that approximately 525,000 homeowners are still in forbearance plans. If you are one of those homeowners moving into a post-forbearance future, there’s no reason to panic: plenty of help is available. Let’s look at the different post-forbearance options and determine which one best suits your needs.

The CARES Act changed the mortgage landscape

When the pandemic struck in early 2020, rumors of the 2008 housing crisis repeating itself soon infused nearly every real estate conversation. Understandably, homeowners have been nervous about repeating history, with fears of eviction and potential homelessness genuinely gripping many Americans. However, contrary to the Great Recession, homeowners have been better protected against the uncertainties of the Covid-19 pandemic.

When Congress declared that homeowners could postpone their mortgage payments for 18 months with no penalty (known as forbearance), this singular act of Congress truly benefited the American homeowner. Additionally, many servicers of mortgages not backed by the federal government voluntarily did the same. And with substantially more equity in their homes than they had at the start of the Great Recession, plus the ability to refinance at historic lows during the pandemic, homeowners were in better financial shape to weather the storm.

Understanding your mortgage forbearance repayment options

Thankfully you’ve got plenty of helpful options as you move out of forbearance and resume your monthly mortgage payments. Here are five options to restart your mortgage payments:

1. A Reinstatement means paying the total forbearance amount all at once. Remember, this is only one option to discuss with your mortgage lender. You do not have to take this option.
2. A Repayment Plan allows you to bring your mortgage current over some time (up to 12 months). A repayment plan is an agreement that will enable you to repay the forbearance amount on your mortgage by making additional monthly payments and your regular monthly mortgage payments.
3. A COVID-19 Payment Deferral allows you to bring your mortgage current by delaying repayment of forbearance amounts without changing other mortgage terms. This option may be available if you cannot afford a reinstatement or repayment plan. You will not be charged interest on the forbearance amounts. However, all sums will be due if and when the property sells.
4. A Loan Modification permanently changes the terms of your actual loan. Some common examples are changes to your interest rate or loan term. But, surprisingly, and in another historic move to ensure the stabilization of the housing market, the Federal Housing Administration (FHA) announced in April of 2022 that homebuyers would be able to select a 40-year mortgage for the first time.
5. A Loan Refinance is perhaps one of the more traditional options, and even if you have resolved or are resolving your forbearance plan, you may be eligible to refinance your loan. 

Forbearance doesn’t stop you from selling your home

The COVID-19 pandemic produced challenges that impacted homeowners’ ability to make timely mortgage payments. Thankfully, taking advantage of the forbearance doesn’t stop you from selling your home, even if you haven’t restarted payments yet. If you can no longer afford your mortgage, but you’ve built up enough equity in your home, one option is to sell it and use the proceeds to help pay off your mortgage and any missed payments during forbearance.

Make an Informed Decision

With more financing options available today than ever before, there’s no reason to worry about mortgage repayment. Contact us today to find out the true value of your home. Then, you’ll be informed and can make a sound financial decision about what type of mortgage is right for you.

Key Takeaways:

• Real Estate Bubbles: what are they, are we in one now, and why there’s no cause for alarm.
• It’s natural to compare today to 2008, but this housing market is vastly different.
• You can lean on our expertise! We’ve seen all types of markets, so reach out with questions.

With home prices soaring to levels never before seen, it is undeniable that the U.S. housing market is in uncharted territory, with many industry experts speculating that we’re in the midst of yet another housing bubble. However, like snowflakes, every bubble is created differently and is unique. 

As mortgage rates rise and rumors of another crash in the housing market fill the news cycle, it may be tempting to get cold feet and postpone your homeownership dreams. But as we’ll explore below, it’s essential to understand the anatomy of housing bubbles, what causes them and why it’s a term you needn’t fear.

What exactly is a bubble within the housing market?

In basic terms, a real-estate bubble is a temporary economic event that occurs periodically and refers to an increase in the overall value of the housing market. When a bubble grows, home values increase; when a bubble pops, property values decrease.

Simple enough, but, what causes the housing market to experience bubbles?

Traditionally, the Law of Supply and Demand dictate a property’s market value. For example, when the demand for housing is high, and supply is low, home prices often rise, typically resulting in a seller’s market. Conversely, when housing supply is high but demand is low, market values fall, resulting in a buyer’s market. However, additional factors such as speculative investing, FOMO (Fear Of Missing Out) panic buying, and risky lending (such as occurred in the 2008 Housing Crash) are all elements that influence the growth and burst of housing market bubbles.  

Why you don’t need to fear housing bubbles

We can always count on the old axiom in real estate: “You can never enter the same river twice.” (Fun fact: Greek philosopher Heraclitus came up with that lasting gem!)

What is meant by this is that history does not strictly repeat itself, and for us today in the real estate market, that means that it’s not 2008. As mentioned above, though the market moves in cyclical fashions, most experts do not believe that The Great Recession is repeating itself in today’s market.   

2022 is not 2008 repeating itself

The infamous U.S. housing bubble of the mid-2000s had its origins in the unprecedented growth of the subprime mortgage market. Additionally, U.S. government-sponsored mortgage lenders Fannie Mae and Freddie Mac made home loans accessible to borrowers with low credit scores and a higher risk of defaulting on those loans. 

None of this is happening today. 

The current market demand is not the result of easy lending. Instead, today’s rising property values result from the natural market forces of a low supply in housing inventory meeting high demand. But with new home construction expected to surge in the second half of the year, this will help ease demand in the future and stabilize the market overall.

Regardless of whether you’re selling your home or are a first-time homebuyer, the key takeaway for you is this: today’s high home values are not likely to crash any time soon, so it is as good a time as any to enter the market.

You Can Count on Us in Uncertain Times

If you’re feeling unsure about whether to buy or sell a home right now, reach out and rely on our expertise to guide you to make a sound financial decision. Our team has the experience and knows our local market, so contact us today and we’ll work with you to find the right strategy for your situation.

Key Takeaways:

• In a competitive market, you want to make sure you’re doing everything right when it’s time to buy a new home.
• Stability with your employment and finances is super important, so don’t make any sudden changes.
• Don’t skip out on working with a buyer’s agent—an experienced real estate agent is an invaluable partner. 

Buying a home is an exciting and sometimes nerve-wracking experience. In addition to finding the right place, you also have to find the right mortgage, and with low inventory in many markets and rising home prices nationwide, securing your dream home can be a challenge if you don’t make the right decisions when preparing to buy. Here are five of the most common mistakes you should avoid when buying a home.

1. Don’t open or close credit accounts

Because mortgage lenders check your credit multiple times throughout the homebuying process, it is crucial that you do not open any new lines of credit or close any existing lines of credit. Doing so can lower your credit score and increase your debt-to-income ratio, both of which are reasons for a lender to deny approval.

It is always a good idea to pay off an existing line of credit, but closing the account removes that credit history from your report. Credit reporting bureaus use your length of available credit to generate your score, so leave your account open and active, but don’t use it until after closing.

2. Don’t switch jobs

The most important thing that mortgage lenders look at when considering pre-approval is an applicant’s employment stability. Typically, they want to see two consecutive years of uninterrupted income for approval. Any changes to employment status can signal that the loan may not be repaid—it can be a significant red flag that can derail or delay your closing. Make sure to tell your lender right away if a career change is unavoidable or if you do not have two consecutive years of verifiable income.

3. Don’t shop for homes you can’t afford

Typically, most prospective homeowners can afford a mortgage between two and two-and-a-half times their gross annual income. An easy way to think of this is not exceeding more than 30% of your income.So, if a lender tells you that you can borrow a lot more than that, you should probably find a new lender because your monthly payments may not be manageable if you max out your loan. Use a mortgage calculator before you visit with a lender to help you estimate monthly payments. 

Also, consider that homeownership comes with additional expenses you will need to save for, like maintenance, repairs, insurance, property taxes, homeowner’s association fees (if applicable), and other unforeseen costs. The last thing you want to do is stretch your monthly budget to cover your mortgage, which will eliminate your liquid cash flow for your other financial obligations, like car payments, student loans, and your savings goals.

4. Don’t skip the inspection

Waiving a home inspection can be a costly mistake, and unless you have extra cash to fix up a home, you are gambling with the cost of unforeseen repairs. Home inspections find potential critical issues with the structure and integrity of a house, such as cracked pipes and water damage. They are built into the home buying process to protect the buyer’s investment.

Paid by the buyer and non-refundable, the home inspection fee is a small price to pay when considering today’s costs to replace a furnace, water heater, roof or other costly items. 

Without an inspection, you will have no recourse if a significant issue surfaces after you close on your home. So when you make an offer on a home, include a home inspection contingency that gives you a penalty-free exit from the deal if a major issue is unresolvable before closing.

5. Don’t forget to hire an agent!

Searching for a home on your own is both time-consuming and complicated. That’s why the help of a professional, experienced real estate agent who knows how to navigate the market will guide you to make the best investment of your money. 

Also, if you go to showings without a real estate agent, a seller’s agent may offer to represent you. This can be risky because that agent’s goal is to get as much money for their client as possible from you, the buyer. In addition to helping you negotiate, a qualified real estate agent will have access to home listings before the general public becomes aware of them.  

Best of all, the cost of enlisting an agent won’t come directly out of your pocket. Instead, the seller typically pays it to the seller’s agent, who splits the commission with the buyer’s agent!

Do Find Your Real Estate Team Today!

When it comes to buying a home, there’s a million little details to keep track of. Work with an experienced real estate agent to help you navigate the entire process, avoid pitfalls, and get you the home you’ve been dreaming of. Contact us today to get started!

Key Takeaways:

1. Oil and gas prices are the highest in United States history!
2. Individuals and families are shifting how they think about housing, from suburban versus urban to downsizing or going multigenerational.
3. It’s critical to work with an agent who understands the right fit for you and your family.

Record-high oil and gas prices are changing home buying and selling

It’s difficult to escape the news: gas prices are surging across the nation, with the increase averaging $1 per gallon. With costs at historical highs, the ripple effect changes how we think about everything. That includes the largest line item on any household’s budget: their home. How will this new reality change how people buy and sell real estate? Let’s take a look at some of the main considerations. 

Urban Versus Suburban

Traditional wisdom says that the suburbs are more affordable with their long commutes, while cities are expensive due to more amenities and desirability. But when the daily commute costs more than it ever has in the history of the country, the conventional advice isn’t necessarily the right move for everyone.

To judge whether relocating from the suburban to the urban is right for you, take a look at the commute time, proximity of local amenities, and public transportation. Some urban centers offer more robust and reliable options for getting around, while others are still heavily car-dependent. If moving into the city won’t get you out of your car, the suburbs are still a good choice. But big city living is an attractive option if you can reduce how often your family drives—or even go from a multi-car family to a single vehicle. 

Reconsider Your Housing Footprint 

The size of a home is always a big consideration when you’re looking at your next place. Right now, there’s the added pressure of the costs of heating and cooling a home to consider when you think about total square footage. On average, the cost of natural gas is up 24% in February 2022 compared to the previous year, and electricity is up 9%. 

Downsizing can be a smart reason to sell your home and buy a new one, especially if your family situation has changed and you don’t need as much space. With less to heat, cool, and maintain, finding a home that’s just the right size for the stage of life you’re in is something your agent can help you with. 

During the COVID-19 pandemic, families started moving back in together at rising rates. Now, more than 40% of homebuyers consider multigenerational living in their purchasing decision.  New developments are dedicated to building homes and communities that accommodate people at different stages of their lives. And, if the family situation changes, being able to rent out a dedicated space is an excellent source of passive income. 

Whether you’re looking to go small by yourself or go big and share the costs, homes that are renovated with energy-efficient appliances, or new construction with the latest smart home technologies, are especially attractive. These are smart decisions to make now that will also save you costs in the long run, even when oil and gas prices stabilize. 

Act Fast to Lock in Interest Rates

Gas prices are tied closely to mortgage rates. Yep, it really does affect everything! Mortgage lenders want to have an extra cushion over inflation when they set rates, and with the rise of oil and gas prices, interest rates will get pushed up too. If you’re buying a home, it’s time to get serious about making offers. Higher mortgage rates will impact what you can afford. 

For sellers, this can impact the white-hot housing market streak that was the dominant theme for the last few years. With interest rates set to rise, home sellers may want to be flexible about offers, in case the market shifts dramatically as interest rates go up throughout the remainder of the year. Of course, this varies widely by market, and you’ll want to consult your agent before making any decisions on offers on your home. 

Make Your Move

There’s no time to wait—with the market changing this rapidly, you’ll want to leave yourself enough time to have options and make a well-informed decision. That’s why you need to work with an agent that understands the ups and downs of this historic market and considers the needs of you and your family. Contact us today to get started!

Key Takeaways

• Even in a seller’s market, you may still need to reduce your price
• Consider if you’ve tried everything else before a price reduction
• Make sure to seek the advice of your trusted realtor–we’ve seen it all before!

Even in a competitive seller’s market like the one we’re in right now, listing your home for the right price is key. Don’t count on a bidding war happening to get the price you want! Let’s take a look at what you should do before listing your home, indicators that your home is priced too high, and the strategies you can use to make the price right. 

How Do I Figure Out the Right Price?

When home prices are rising quickly, low appraisals can affect your listing price. With year-over-year home prices up 17% on average nationwide in 2021—with some markets seeing as much as 35% increases—the appraisal you receive may not reflect other recent asking prices in your area. 

Your experienced real estate agent will use data from the local MLS and consider other homes in your neighborhood and what they sold for recently. They’ll also consider tax data, your property’s previous sale price, and even micro market trends. Working with an agent in such a fluid, dynamic market is essential to getting the price right. 

Since your largest pool of buyers often finds your home within the first 21 days of listing, try to list your home at the right price from the start. If you’re not seeing the offers you thought you would, make an adjustment quickly before the initial interest fades away. 

If the first week of listing your home isn’t resulting in offers, especially in a market this hot, that’s a red flag your home is overpriced. However, if you’re getting offers, and they just aren’t meeting your listing price, it’s a good sign you’re in line with the market and may need a small decrease. 

How Do I Know When to Lower the Price?

It’s exciting to list your home in such a historic market, but moving too fast and forgetting the basics can hurt your chances of success. Work with your real estate agent to market your home. This includes cleaning and decluttering your home, staging rooms, taking attractive photos, and communicating the value of the property in the listing. 

Rely on the most recent data to find the sweet spot for price. You’ll want to consider homes recently sold within a mile or two of your home, especially ones with the same number of bedrooms and bathrooms and square footage within 20% of your home that closed within the last 90 days.

If all of that is said and done and you’re not receiving any offers, you may need to lower the price. Even in a seller’s market, selling over asking or enjoying a bidding war for a higher price is not guaranteed. Make sure you know the lowest price you’re willing to accept before you list your home, so making a change won’t feel like taking a loss. 

When it comes to finding the new price, there are a few things to consider. While the general advice is to lower anywhere from 0.5% to upwards of 3%, you also want to pay attention to your price bracket and what buyers are searching for. If lowering your price brings you down from $410,000 to $398,000, that will open up your home to a new pool of buyers searching for homes under $400,000. 

Price Your Home Right from the Start

Real estate is a continual learning process, and it takes effort to figure out the right price. That’s why you should work with our experienced, trusted team to get started out right! Contact us today to find the true value of your home based on the most recent, up-to-date, micro-economic data available. Our team is here to help you sell your home for top dollar. 

Key Takeaways

• First-time home-sellers need an accurate value before listing.
• Sellers need to make smart choices on repairs and staging.
• Offers are evaluated on multiple factors, not just price.

The three most common questions first-time sellers ask our real estate team.

It’s common to be overwhelmed by the number of questions you inevitably run into when you’re selling your home. Does the doorbell work? Are the exterior colors suitable for today’s market? Am I getting what my home is worth? From marketing the house to negotiating a fair market price and making repairs, here are some of the most common questions sellers ask us and some helpful strategies you can utilize when selling your home.

Question 1: How do I know what my home is worth?

Ultimately, a home is worth what someone will pay for it. However, there are three values attributed to any home currently on the market:

• What the seller thinks it’s worth.
• What the buyer assumes it’s worth.
• What a professional appraiser will think it’s worth.

One of the most critical aspects of selling your home is quickly getting those three numbers to align. Most real estate agents freely perform a comparative market analysis of home values to establish a property’s value to determine a selling price. They look at factors such as square footage, construction quality, condition of the home and neighborhood, design, and floor plan, plus all of the neighborhood’s features, like transportation availability, nearby shopping, and area schools. 

Question 2: How do I get my home ready to sell? 

Nearly all home purchase contracts include an inspection clause. This term is a buyer contingency that allows buyers to back out of the deal if numerous defects present themselves or negotiate their repair. 

The trick to getting your home ready for the market is not to overspend on pre-sale improvements, especially if few houses are on the market with many buyers willing to pay almost any price. On the other hand, making such investments is the only way to stage and sell your house, even in a market that favors sellers.

Here are some quick highlights of expected home improvements and staging tips that every homeowner should have on their checklist going into negotiations:

• Make sure that your roof is up-to-date; this will get you the highest return on your investment.
• Fix any maintenance issues, such as leaks, plumbing problems, drafts, rusty areas, squeaky floorboards, mold, or mildew well before buyers can find them.
• Applying a fresh coat of paint will make rooms look brand-new! 
• Polishing lighting fixtures and upgrading light bulbs is an inexpensive way to make a home look newer and brighter. 
• Less clutter helps a home look larger inside, so remove extra objects or furniture to give your home a more spacious feel.

Question 3: How do I pick the right offer on my home?

While seeing a bid over-asking price will make your heart race, it’s best to take a deep breath and consider the whole picture. Buyers include contingencies, like inspection, financing, and appraisal, in their offers. The fewer contingencies, the better it is for the seller.

You can consider an all-cash offer to eliminate the risk of contingencies. Anywhere from a quarter to a third of home sales now are cash offers, depending on the market, so this is more common than you may think!

What’s your next step after your home sells? The closing timeline can influence choosing your best offer—perhaps you’re in a hurry to move into your new place, or you need some extra time to finish packing. There’s always a lot to consider, and each seller’s needs are different.

The ultimate question: what are my net proceeds?

Because the real estate market is continually changing, and market fluctuations affect property values, your list price, sale price, and closing costs must be based on the most recent comparable sales in your neighborhood. To find out the current value of your home, contact our team today! Selling your home is a team effort that yields more success with the help of the most qualified and skilled realtors.

Key Takeaways:

• The historic low housing inventory creates value opportunities in competitive housing markets.
• Anticipation of new home listings to hit a 10-year high as some owners see right now as the best time to sell.
• Condo and rental demand are likely to surge as inventory supply chain issues impact the housing market.

This Year Will Bring Balance to the Housing Market

After two consecutive years in which words like “unprecedented,” “historic,” and “white-hot” have been buzzing about, we can now add “inflation” to the list. 

What is inflation, and how will it affect the real estate market in 2022?

Real estate is not immune from the inflationary effects of declining purchasing power on an economy. When prices go up, so do the costs associated with real estate. In a nutshell, that’s how inflation works; like a rising tide lifts all boats, so does inflation with rising costs. However, there are always reasons to be genuinely confident in real estate’s proven ability to hedge against inflation and be profitable. 

Here are three particulars and tips to help you navigate these inflationary waters and better prepare you to make your move when you decide it’s time to do so. 

#1: Low Housing Inventory Drives Values

With the market expected to remain undersupplied throughout the year and with this year already seeing historic low numbers in housing inventory, continued supply chain issues, and material costs resulting from inflationary pressure will undoubtedly influence the market. Many analysts are anticipating a modest 3% growth in home values, compared to the 24% return that last year saw.

Historically, it is well-documented that real estate remains profitable when inflation affects an economy. One reason is that landlords can always pass their cost increases off to their tenants. But the real lesson here is the age-old axiom that scarcity creates value. So instead of seeing the record-low number of housing inventory as something to steer clear of, it means that while there may be much competition in home buying, that’s because of the value of being a homeowner.

#2: New Listings to Hit 10-Year High

The end of double-digit price growth in home values will also encourage more homeowners to cash out finally, which will create more inventory in the market. But as the market settles down and becomes more balanced, homeowners will also be more inclined to list their homes to offset inflationary pressures elsewhere, though it will not be enough to meet the expected historical demand in 2022. This increase in listings of existing homes will also coincide with a slight increase in the listings of newly constructed homes, similarly expected to be the highest in a decade. 

New home inventory should increase from 2021’s bottom, but we anticipate the market will remain undersupplied. In particular, the entry-level supply of new home construction will remain highly constrained. 

#3: Condo and Rental Demand Will Take Off

2022 will also see the end of mortgage forbearance, which along with inflationary pressures, will cause many homeowners to sell and rent instead. This surge in rental costs and demand will create opportunities for others looking to get into the housing market. As a result, expect rents to increase 7% by the end of 2022, more than double the predicted year-over-year growth in home prices of 3%, once again proving that homeownership is always a more reliable use and investment of your money. 

As the pandemic subsides, more people will live in cities once again where renting is more common. Additionally, the strong labor market will cause many movers wanting to move into a new town the opportunity to get to know their new city before they commit to homeownership. 

The Market Is Moving—Get Started Now

There’s always much to consider when buying a new home. Whether you’re a first-time home buyer or looking for your next, understanding the more significant economic trends is always important to maximize your efforts’ success. So contact us today and let us know how we can help support you in your journey.

Key Takeaways:

• Even in a seller’s market, it pays more to be mindful of how you present your home—and color is a key component!
• This year is all about earthy greens, fun pastel blues and yellows, and smart neutrals to really create a sense of comfort.
• Have fun with DIY projects and go hunting for unique antiques to transform traditional rooms into flexible spaces!

Home Buyers Are Searching for Comfort and Versatility

Even though 2022 is predicted to remain a seller’s market, a little effort upfront will go a long way towards closing. You don’t need to do a major renovation to bring modern trends and styles into your home, regardless of its age. Clean, neat, and orderly homes certainly help, but the right color palette can really add some extra oomph. 

Here are three of the leading staging trends and top color palettes that can help add value to your home and bring in bids. 

Invite the outside in through shades of green

After a tumultuous few years, 2022’s trends are focused on self-care and comfort, which are reflected in soothing color schemes. The right colors can bring a sense of belonging into your home. With an overall emphasis on wellness, it’s no surprise that homeowners are falling for hues that are reminiscent of the outdoors.

Earthy, organic palettes provide balance and a breath of fresh air. Green is easy on the eyes, inspiring, and provides a sense of security and belonging. Colorful kitchen cabinets are a relatively quick paint project and very on-trend for 2022. Herbaceous colors such as sage, mint, and thyme tie in perfectly to the gastronomic heart of a home. 

Potted plants bring a sense of vitality into a space, and certain varieties help clean the air so prospective buyers will truly breathe easy. To break up the green, try a soft peach or light apricot. They’re calm, straightforward colors that evoke shelter and stability. Bonus: green plants pop when paired with these more subtle shades of orange.

Bright blue and yellow pastels are perfect for flexible spaces

3 bedrooms, 3 baths and…where’s the office? The classroom? The gym? COVID-19 has changed how we live, work, and play—and what we look for in a home. Gone are the stringent definitions of a room’s purpose according to the blueprint. Extra bedrooms are now learning centers, the dining room is for quality time with friends, and the basement is the best hot yoga studio in town. 

With homes becoming more functional spaces, the colors need to be comfortable and calm. Warm, soft yellows add a sense of sunshine to any room. To avoid veering into neon highlighter territory, go for pastel shades of chamomile or buttermilk to bring optimism and cheer without any glare. 

The home isn’t quite as intimate as it once was now that we invite everyone from coworkers to teachers into our homes via video call—so now, you can create a space that shows buyers you understand their need to impress. While dark blues are the trademark of the corporate world, lighter hues like mist and sky reign over the residential realm.  

Reclaimed materials stand out against strong neutrals

With the world so different from what we’ve previously known, there’s a newfound value in nostalgia. Luckily, second-hand furniture not only evokes warm feelings of remembrance but also ties into the movement to go green. 

With supply chain complications still affecting the marketplace, there’s a resurgence of interest in using reclaimed materials as an anchor piece. Many second-hand stores offer refurbished pieces, painting over lackluster patinas with bold color palettes, geometric patterns, or ombre. You can always go the DIY route, too—but with more than enough to do to get your home ready, buying rehabbed pieces is a huge time-saver. 

Go with neutrals for the rest of the room to show off a bold find. Beige may sound boring, but it brings connotations of dependability. In these ever-changing times, there’s nothing wrong with wanting to go back to basics once in a while. Plus, with varieties such as ecru, stone, and taupe, there’s nothing basic about this perennial staple. 

Use Our Staging Tips for a Top-Dollar Home Sale

It takes thought and effort to bring your home to its full potential, so you can sell at the highest possible price. We’re ready to do a walkthrough and offer suggestions on how you can get prepared to sell. We have the experience and know what buyers want. Contact us today and let us know how we can help prepare your home for a top-dollar sale!