From 2020 to 2021, the real estate market shifted rapidly from a "buyer's market" to a "seller's market." According to National Association of Realtors (NAR) Chief Economist Lawrence Yun, prices rose more quickly than ever in the modern era. Although this was great for investors and homeowners, home buyers felt the pinch with the inventory at an all-time low. Personally, in 2021 I saw my best year ever however working mostly with buyers became a major challenge. How do I get these offers accepted while protecting my clients at the same time? It was a total strategic balancing act. The difficult part is that nearly a quarter of these purchases were from investors with all-cash offers. What this means is that no appraisal is required because there isn't a loan involved. From 2020 to 2021, investor purchases rose from 15% to 22% and 27% were all-cash deals.
Now that we are entering what seems to be a post-pandemic era, Yun predicts home sales to slow down by 2% to 4%. And while we continue to see the Fed raise interest rates, this could result in as much as a 10% decrease in home sales. These higher mortgage rates will essentially box out many would-be buyers. Even the wealthier "1%" are predicted to hold their money as a result of the sluggish stock market.
The best takeaway, one which feels good to me is that prices will continue to rise. Albeit slowly we will still see an upward trend. Yun predicts "price gains of 3% to 6% per year in 2022 and 2023." What this means to me as a real estate professional is that it is still a good and safe time to buy or sell.
If you have any questions about the local real estate market, please do not hesitate to call or text me. I love educating people and learning myself.
To read the article by Lawrence Yun, NAR Chief Economist, click HERE.
