In the last year we saw home buyers going-for-broke. The market was so hot and supply was so low that many buyers were forgoing contingencies (meant to protect them) in order to close the deal. People were using their retirement just so that they could pay in cash, an apparent demand of some sellers in the hottest markets. Cape cod saw their inventory go from over 2,000 homes to under 300. Many people wanted in, but the prices pushed many first time buyers out. Is this a trend we can expect for 2022? The answer appears to be no.
We at Ali Safavi Real Estate, and other realtors we’ve talk to are seeing a slight cooling in the market. Buyers aren’t in the same rush they were six months ago. The need for a cash offer has leveled off. Properties are being listed for longer. Prices may continue to rise in some areas, but not at the skyrocketing pace of recent.
What factors are helping the market to cool? The pandemic is and has been a major factor. The other is inventory. Housing construction is up, lumber costs are beginning to fall, and lumbermills are being constructed. This doesn’t mean the housing shortage will be fixed anytime soon, but help is on the horizon. There’s also talk of mortgage rates rising. When you talk to many potential buyers, one of the biggest draws to buying a home is that interest rates are so low. Once you start removing that factor, it’s going to push some people out of the market.
What does this mean for people waiting to buy a home? Now may still be the time. Prices could still rise along with mortgage rates. However, if you were preparing to stretch yourself thing…maybe too thing, it’s okay to wait. We at Ali Safavi Real Estate always recommend being in the strongest financial situation possible before buying a home. Save for a good down payment, make sure you can cover not only the rent, but the taxes and upkeep that comes along with it.