Real Estate Trends 2022: Things Home Buyers and Sellers Should Know in This Unusual Market
As price cuts become more common and inventory slowly rises, you may be wondering whether to buy or sell. Zillow Economist Nicole Bauchaud distills three big takeways from the latest market research.
1. Waiting for big price drops may be a bad idea.
Takeaway:
“We’ll see the usual slowdowns that come in the fall and winter,” says Bauchaud. “But it’s probably going to be even more pronounced this year, as we’re seeing people pulling out for reasons like budgetary constraints and higher interest rates. Home values will continue to decline for the off months, just not by much.”
“And when we’re looking at the amount that homes appreciated over the course of the pandemic, these small dips in prices are not meaningful in making a home affordable. They’re also not hurting homeowners’ equity.”
“Inventory is still way too low in order for those dips to make a real difference. As soon as prices get to a point where more folks can afford to buy a home, they and every other buyer waiting on the sidelines is going to jump in there. That demand bump is going to push prices right back up.”
2. Take your time to pick the right home.
Takeaway:
“If you’re a buyer right now who can afford it, this can be a great time to buy,” says the Zillow economist. “You don’t have to waive all your contingencies. You don’t have to worry as much about bidding war situations. We’re seeing prices falling slightly, and buyers now have negotiating power for the first time in several years.”
“Buyers are really having that ability to breathe and negotiate, which they haven’t had for a while. You should take your time and think things through.
3. Pre-pandemic market
Takeaway:
It can be nearsighted to look at conditions relative to how they were six months ago but ignore how they were three years ago,” says Bachaud.
“It’s important to help sellers understand the world is not ending. Homes taking a few weeks to sell, or sellers cutting prices in late summer, are not abnormal in terms of the big picture. It’s okay if your house sits on the market for three weeks. It’s okay if you don’t get 20 offers. You only need one buyer. Just take a deep breath and let go of the pandemic frenzied market. The last few years were an insane time in residential housing. That’s behind us now.”