This winter’s market will offer opportunities for both buyers and sellers. Danielle Hale, Chief Economist for Realtor.com predicts this post-pandemic winter season will see plenty of buyers looking to purchase.
Lawrence Yun, Chief Economist of the National Association of Realtors says there will be more sales this winter than reported from past winter sales records going back to 2006.
While the number of buyers looking to purchase this winter may be lower than during the spring/summer season, these buyers are serious and ready to buy after missing out in the highly competitive markets of this past year.
Trends To Watch:
Home Prices May Have Peaked.
Home prices have risen to an all-time high, and according to Realtor.com median home prices in the US are up 9% from a year earlier. Locally Queens reported a closed median home price of $685,000 representing a 5.4% change from $650,000 reported by MLS last October. Nassau County’s closed median home price increased 10.5% over last year – $650,000 versus $588,000 reported by MLS last October. Suffolk County showed a 10.6% increase showing a closed median price of $520,000 from last October’s $470,000. Queens, Nassau and Suffolk County median prices however have decreased 1-2% from last month’s median prices. As more homes come on the market in the spring and interest rates rise we may see the growth rate in single – not double-digit appreciation.
Interest Rates Will Rise.
Interest rates are still expected to increase from today’s 3.1% to close to 4% by the end of 2022. Lawrence Yun urged sellers to check their local market as some homes are lingering on the market – longer than previous months and indicate a price adjustment may be needed. Sellers may have continued to price too aggressively. Also as interest rates rise buyers can afford less and pressure on prices becomes apparent. More normalized price appreciation will help with affordability and sustain the market.
Demand Is Still Strong.
The main market mover is demand and that is still strong. The Millenials are still looking to purchase their first homes and a large demographic are thinking about their next move as many are able to benefit from the decentralized workplace after the pandemic. Many are re-evaluating family and lifestyle needs and considering a move to be nearer family, find different amenities in a home and community or a less expensive location in general.
Jan Hatzius, head economist at Goldman Sachs writes that “the supply-demand picture that has been the basis for predictions for a multi-year boom in home prices remains intact.” Demand is strong and there is still a shortage of homes for sale for a variety of reasons from materials supply shortage, labor shortages, and increased costs.
So this winter buyers should be able to take advantage of less buyer competition, still-low interest rates, and prices that will still be lower than whatever home appreciation takes place during the coming year.
Those selling today will want to consider a well-thought-out plan if they intend to purchase. If a seller is in a strong seller’s market then they may be able to negotiate a “home of choice contingency” with their buyers. Their sale depends on the ability of the seller to find a suitable home within a certain timeframe or the contract is canceled. Most buyers won’t want this uncertainty but this option may be effective in certain situations.
Contact us for a complimentary Professional Equity Assessment Report so you can better plan your strategy and “next move!”