2022 is already moving forward as quickly as 2021. We’re already into the second month of the year and it feels like the real estate market is about to take a major surge. Why? There are actually a variety of factors that are currently fueling the increase in home prices. Whether it’s a lack of inventory or higher demand than in past years, the fact is that homeowners are able to sell their property in less than a month and get asking price or even higher.
What Will 2022 Produce?
People are wondering if prices will begin to drop. The surge over the last two years alone has created a bubble where prices are just about to the point where they are unreasonable to median income families. However, the fact that demand is still high, and inventory is not where it needs to be is enough to leave most real estate experts certain that 2022 will be a year of continued growth in the industry. Here are some of the top expectations for real estate in 2022:
- Increase in home availability: Believe it or not, 2022 is shaping up to be a year where the number of homes for sale begins to increase. Over the last two years, one of the main driving factors in prices skyrocketing is because of a lack of inventory. However, in 2022, many homeowners will look at the value of their property and see an opportunity that’s too good to pass up. A home purchased even 7 years ago is now doubled in value depending on the condition of the property. Even someone who purchased a home two years ago may see an increased value of 20-25% depending on upgrades made to the property. More homeowners are going to want to cash in and grab the money while they can.
- Converted condos will skyrocket: Because inventory is still low, several apartment buildings will be converting into condos. For those who own apartment complexes, the rising costs in taxes and insurance has made the option to switch to condos much more lucrative and easier to manage.
- Buyers will need to be fast: The day you go to an open house to view a home is the day an offer will probably be made that ends up purchasing that home. Houses are not sitting on the market more than a couple of weeks and out of state competition is growing as well. Buyers need to be preapproved and ready to make an offer the day they go to an open house.
- Short-lease rentals will be easier to rent: For those interested in renting, while it may be a bit more work, it’s smarter to offer short-term lease options of six months. Property owners have found that they can charge more per month as people are moving to the area because of new job opportunities. Because of this, they are not yet ready or able to purchase a home or sign a long-term lease. Therefore, they will be willing to do a short-term agreement, even if it increases the monthly rent prices.
Homeowners will have the advantage this year as they can demand higher prices and usually see faster closings. Buyers will also be less picky, trying to get whatever they can afford and worry about making improvements on the property later on. If you are looking to purchase a home, be sure that you are well prepared before you start hunting.