I hear is all the time…”the real estate market is going to crash in 2022, so I am holding off buying anything until then”. Well, is that accurate, or not? Let’s take a look at some facts and forecasts:
- Buyer activity is up 12.5% over last year at this time.
- The inventory of homes for sale is down 26.8% versus last year. In fact, as of 1/21/22, there are only 51 homes listed for sale in the Rim of the World MLS (which covers Crestline to Green Valley Lake). The all time low was hit on 1/14/22 when we only had 41 properties for sale. Land inventory is also at an all time low of only 100 properties listed.
- The average listed home is receiving 3.8 offers, and are selling over the list price (anywhere from 1% to 10% above)
- The current market obviously favors sellers.
There are some factors that will be affecting the market this year:
- Mortgage rates are forecasted to rise, but will still remain below the long term benchmark average of 6%
- The federal government is trying to open up more funds for first time and primary home owners. To do this, they will be increasing the closing costs associated with 2nd home/vacation home loans (time to speak with your lender about viable options).
The bottom line for today…If you are a seller (or potential seller), now is the time to list your property. If you are a buyer (or potential buyer) bring your patience, and anticipate that you may get into multiple offers above the list price. Increase your opportunity to get the property of your choice by putting more money down, and have a pre-approval, from your lender, in-hand prior to even looking at property.
To answer the very first question…there is no sign of a crash in site. For the real estate market to crash, we need to have an excess inventory of home listings. That just isn’t the case. Prices are anticipated to appreciate anywhere from 5% to 7% this year , due to the low inventory, and high buyer demand.
The big question mark still remains, how will the current declines in the stock market affect the market and will investors move their money out of stocks, and into an already tight real estate market?