Happy New Year! We’ve all been watching the real estate market surge with activity over the past several years, particularly since early Spring of 2020. Both buyers and sellers have been affected both negatively and positively. As a seller, values have gone up significantly, but finding a replacement home has been a serious challenge. As a buyer, prices have gone up, but WOW, those interest rates sure have helped ease the burden. The question I keep hearing is whether it might be a good idea to wait until the market cools off to make a move.
Economists are projecting a steady increase in values from here on out over the next couple of years. This is not to say that we are expecting 20% increase in values year over year any longer, but rather a steady, normal market adjustment such as between 3-5%. As a seller, I would take note of this and if you have been thinking about selling in the near future, now would probably be the best time to maximize on current market conditions. While you may still benefit from a solid and somewhat similar value in the next year or so, if prices continue to rise, the number of buyers readily available and ABLE to buy today may decrease. What has been driving this market is incredibly low interest rates and even less inventory. Traditionally in the springtime, we see more homes come to market, which will, in effect, create more competition. Currently, there is very little competition for sellers, which could serve to benefit a seller.
As a buyer, the extremely low interest rates have created more affordability. Those rates are starting to rise and are expected to continue to adjust in an upward motion over the next year. If there has ever been a time to get into a property, whether your move up property or your first home, this is it. I have personally been buying and selling real estate for over 20 years and have never seen rates as low as they have been with 30-year fixed terms. That said, don’t expect to buy now and sell for 20-30% more in 2 years because we just don’t know where the market will be at that point. Rather, plan to buy now and remain in the property for at least 5-7 years to give you a realistic opportunity to grow your equity at a normal rate and to adjust with these inflationary conditions.
Bottom line…if you have been considering buying and/or selling in the near future, don’t delay. There are some strategies to protect you during the process that I can share with you. Give me a call at 619-944-2798 to set up a no-pressure consultation with honest feedback and suggestions. I look forward to helping you achieve your goals and build your wealth in real estate in 2022!