By: MJ Stearns
ROOM Real Estate
Are you in the market to buy or sell and are not sure if this is the right time for you to do either one? U.S. home prices have risen 18.8% over the past 12 months. Home price growth can’t outpace income growth forever. Home prices are growing six times faster than wages. The lack of inventory isn’t isolated to a few hot markets. It’s a nationwide problem.
As we head into the spring buying season, there are a few things you should be aware of if you want to get a house, perhaps the same house 20 others want to get. The price is usually not the price, so let’s just be real here. You see a home and your budget is $899,000, and it is listed for $899,000, so should you really be looking at this home? Unless a home is overpriced, the actual list price is just an attention-grabbing number, and if enough people are interested in that house for $899,000, it is going to sell for somewhere around 1 million to 1.1 million all day long here. So the bottom line is if your price maxes out at $899,000, then you should realistically be looking in the $699,000 range, or you won’t be able to compete to get the home you want and will get discouraged quickly.
How do you win the dream house when you’re competing with all these people and a lot of the time in cash. Make sure you’re working with a real estate professional who knows the market and can negotiate on your behalf. It’s not always about the money. They have other ways of negotiating to get you your dream home. Working with local agents and lenders is also very popular in this area. You want an agent who knows the area and works with the local realtors and lenders so when it is time to work with your agent, they will already know them and want to do business together. Also, the local lender is important because we know they know the area and what to expect here. They usually know most of the realtors, and they trust this person and know they get the job done, and therefore your offers will be more appealing to the professionals on the other side.
Mortgage rates are about 1% higher than they were this time one year ago. What this means for spring 2022 homebuyers is that a 1% difference in mortgage rates can eat into your buying power compared to last year.
The sellers’ market will continue into the 2022 spring home-buying season, but it should be less competitive for buyers than last year. The number of homes for sale should increase compared to 2021, but it is likely to remain lower than normal levels. Buyers will still be facing bidding wars but not as often or as intense.
For sellers, you’ll want to get ahead of any maintenance or upgrades you want to make before putting your house on the market, especially if it is work you can’t do yourself.
