By Sidney Gardiner
What To Expect For South Florida Real Estate in 2022
The Pandemic ignited a home-buying frenzy as a housing shortage converged with historically low mortgage rates shifting dynamics and new opportunities. While the world struggled to find some footing in the early Covid-19 days, the real estate industry was one of the few that managed to adapt. Tagged as an essential business we agents had to find a new normal. After all, buyers still needed to buy and sellers still needed to sell. We had to become more creative and exercise safety at all times. We adapted in a market continuously changing.
The market had begun a slow swing towards a seller’s market years ago, but with the pandemic came a hard shift to the extreme. We now had a scalding “hot” seller’s market. We were seeing things never imagined. Homes selling for way over asking price, and multiple offers. Record low mortgage rates designed to get people into homes also added far more buyers to the market than there were sellers.
As of right now, the upswing seems to have reached it’s peak, and the market is slowing down in many areas.
There are more houses coming on the market, housing prices are stabilizing, and more sellers are going to take advantage before it is too late. The result is a slow shift back to a buyer’s market. However, this shift will not happen overnight.
MORTGAGE RATES WILL SLOWLY RISE
In 2021, mortgage rates have averaged 3.1%. Freddie Mac tells us as we go into 2022 the rates are expected to sit around 3.8% by the end of the year. Despite an uptick in mortgage rates, 2022 is expected to be a whirlwind in the housing market. Home sales are predicted to increase another 6.6% and home prices to rise another 2.9%. This substantial increase will be a strong motivator to buy now, as waiting will even see more increases across the board. The good news is incomes are projected to increase by 3.3% and many employers are looking to attract and retain talent and are willing to pay and many buyers are broadening their search to include work at home possibilities.
Average Home Sale Prices Will Continue A Gradual Rise But Is Expected To Even Out Through 2022 Due To The Increase In Mortgage Rates And More Inventory Coming On The Market.
RENTING? NOT SURE IF YOU WANT TO BUY?
In this hot market many people have been forced to continue renting. Thinking home prices will eventually come down. That being said, the price inflation may not dissipate as soon as one would like. Meaning rent prices are expected to grow to 3.8% by the end 0f 2022. Inflation will continue to rise. So if you are thinking about buying, now is the time, because the interest rates will go up and that same priced home will cost more monthly.
THE MORATORIUM ENDS – NOW WHAT?
The federal pandemic protection has now ended. The eviction moratorium was brought in to protect homeowners that were laid off, or otherwise unable to pay their mortgages or their rent. But now that it’s over, home owners face some difficult choices. As serious delinquencies remain this could have a major impact on the housing market in 2022. Even if a small number of those delinquent accounts opt to sell their home rather than repay the mortgage, there could be a flood of homes on the market. Much to the relief of potential buyers.
SO WHAT CAN YOU EXPECT WHEN BUYING A HOME?
- Set realistic expectations for buying and selling. While buyers are going to have an easier time now getting into a home it’s not going to be the proverbial “walk in the park.” Buyers and sellers alike should be prepared to be involved with multiple-offer scenarios, particularly in more desirable areas.
- Be prepared for the continued growth of housing pricing by saving more for your down payment. This often will get your contract accepted because it is a desirable contingency when it comes to making an offer.
- Understand that the asking price on a home is often times the “starting point.” Asking less to get a bargain will often cause your offer to be tossed out of the running.
- Every situation is different and all facets need to be considered before submitting an offer. A strategy must be well thought out.
- And don’t forget about closing costs. Have money saved so you are not relying on lender credits? In this market, it is rare to get credits.