In most years, the real estate market is a little quiet after the holidays.
We’re in a different environment this year. 2022 is shaping up to be a HUGE year in real estate even as interest rates are increasing. As interest rates increase, the dollar value of home you can afford drops. That’s why it’s important for people who are sitting on the fence to jump off and get in the game immediately. If this is you, listen up.
In a typical year, some people are waiting until Spring to put their homes on the market. That means there’s no shortage of buyers, and many of them are waiting for their dream home to come on the market. If you’re selling, you’ll sell quickly if your home is priced right. Buyers want to make a purchase and lock in their loan rate as soon as they can in order to avoid interest rate increases.
In January, new home sales jumped by 11.9% month-to-month nationally. Existing home sales dropped by 4.6% nationally, and experts attribute that to low inventory.
Locally, the shortage of available homes for sale is real. In December, the active listings number dropped over 26% year to year. That was a drop from 3800 to 2800 active listings comparing December 2020 to December 2021
In our area, pending sales in December were flat, so there were nearly as many closings as we had in December 2020, with over 25% less inventory. A shortage of inventory is one of the things driving prices up. Year to year prices increased over 5%. The average home sale in December was $290,000.
Right now, we have a perfect storm of upward pressure on interest rates, combined with tight supply, and a lot of people hanging on to find their next home as soon as it hits the market.
If you’re buying this year, you may not want to wait. If you’re selling this year, now is the perfect time to put your home on the market.