Selling Your House in 2022 – Will Real Estate Crash
- Current Housing Market
- Will Real Estate Crash
- Rising Mortgage Rates
Current Housing Market
We can all agree that 2022 has been an interesting year. Gas prices have skyrocketed, homes have been rising and lowering at random rates, and remote work has continued to be more accessible. A big question people are asking is, will real estate crash?
What does all this mean for you as a home seller, late in 2022?
So far in 2022, the housing market has completely shifted. Looking at the progression of the Year 2022 you will see that most houses were increasing at their all-time high and quarter one. In the second quarter, the houses stopped rising and stayed steady. Moving into the third quarter there is an obvious slight decline happening across the nation.
Now, what is this mean for the future of the housing market? Is there going to be a rapid decline? Will the market going to correct itself? Or, is it going to absolutely continue to grow again?
These are the questions that everyone continues to ask. The true answer is that whether the housing market goes up or down, people will continue to sell and buy houses Across the Nation. Historically the housing market will always increase over time.
Looking at the housing market from August 2021 to August 2022 there has been a year-over-year increase of about 13.5%. Now when you compare a month-over-month analysis taking in July 2022 to August 2022 there has been a decline of 7% on average. This data was presented by CoreLogic.
Additionally, CoreLogic data is showing a high risk for decline in specific areas within these states; Nevada, Idaho, Washington, and Florida. Remember these are just projections but make sure you pay attention.
The best time to sell and/or buy was yesterday regardless of what’s happening in the market. Sure you can make more money selling at the exact right time. But if that is how you were thinking you are just gambling. Focus on what’s in front of you; you will be fine in the end.
Will Real Estate Crash
This is an interesting and tough question to answer. The market is 100% softening, but does that mean it is going to crash? Here are some points you have to look into:
Housing Inventory – Per Fred Economic Data, looking at California only in 2019 there were an average of 74,738 homes listed per month. Then in 2021, there was an average of 33,968 homes listed per month. That is a decrease of 40,770 homes listed in a given month, which created very high demand due to the limited inventory.
Now in 2022, the average has increased to 41,128 monthly homes listed. Still low demand, but more options for the buyers can create some cooling. In order to get to a crash, more has to happen.
Buyer Demand – This is just California being referenced, but you can imagine if it is happening in California, what is happening to the rest of the nation. Everyone would love to move to buy a house in California, so there is always demand. What affects the actions?
In 2021 and the beginning of 2022, there was an extremely low-interest rate to buy a house. This interest rate was historically low, making the house very affordable, regardless of the higher price. Now those interest rates have skyrocketed. Buyers are now being pushed out of the market with the high prices.
Yes, the demand is still there, but that doesn’t mean the mortgage prices fit in the budget anymore. This is forcing sellers to have to bring down the cost. The cooling will stabilize as long as sellers are willing to decrease their costs and buyers can keep up with their payments. Now that is the perfect world.
Housing Bubble, What is it?
When property prices increase rapidly and uncontrollably, there is a housing bubble. A healthy and sustainable price increase rate is typically regarded as being in the high single digits. In a healthy market, homeowners accumulate equity over time, sellers can resell their properties for a profit, and buyers can still afford to enter the market. Economic reasons including a strong job market and low loan rates typically account for this price increase.
If you are buying a home, be ready for anything to happen. Now sellers, most of your homes were for sale prior to this major increase. So if you lower the asking price, you will most likely still come out on top. It is still considered a seller’s market and a good time to sell.
Rising Mortgage Rate
What is a Mortgage Rate?
A mortgage rate refers to the interest rate applied to a mortgage. Lenders set mortgage rates, which can be either fixed (remaining the same over the course of the mortgage) or variable (varying in accordance with a benchmark interest rate). According to the borrower’s credit history, mortgage rates change.
This has put a big shift in the mortgage rates in just the last year. Per Statista, in Q3 of 2021, the mortgage rate was at about 2.17% on a 15-year fixed mortgage (2.87 on a fixed 30-year). Move to September 2022 and the 30-year fixed rate has risen to 6.29 according to The Freddie Mac Survey.
There is a major change and the buyers are feeling it. There has been a lot of talk about this rate continuing to increase. This completely changes the sale price of an existing home.
Home prices and mortgage rates have to shift for buyers to make a purchase. The question is, what will come down first?
Will the sellers lower the cost of their homes to help potential buyers or will the mortgage rates come back down? Only time will tell. This will be a major factor in the question, will real estate crash?
If you need to sell and you’re running into an issue, buyers will be backing out. Connect with Sell Your House Direct and quickly receive multiple offers from prospective buyers.
When it comes to selling your home you have options:
- Sell with a real estate agent – Renovate what’s necessary for your house to make it presentable.
- Find an off-market buyer – Sell it as is and take away the stress of having to do any unnecessary work.
When it comes to buying your home you have options:
- Buy with a real estate agent – Negotiate the price and find a solution that works best for both you and the seller.
- Find an off-market property – Many people want to sell their home, but don’t have the resources to list it on the market. Help the seller come to a solution that benefits you both (no renovations, cover the closing costs, or even help them get situated in the next chapter of their lives).
All in all, there are options for both buyers and sellers. If enjoyed this read and would like a consultation, reach out to Sell Your House Direct today! You will be provided with resources to help you sell your home and receive offers and options quickly.
Selling a Home with Lead or Asbestos Problems? Here’s What You Need to Know and Options Available to Help Make the Sale Easier.
Seller’s Duties to Share Information About Lead Dangers If you are selling a house that was built before 1978, there are responsibilities you have in sharing information about lead paint and other sources with your prospective buyers. If you aren’t sure whether...
Inheriting a home can be a blessing or a curse, depending on your circumstances. For some people, it's the perfect chance to finally live in their dream home. For others, the idea of taking on the extra property – and all of the associated responsibilities – is...
Selling an inherited home can be a difficult and emotional process, but it is not impossible. There are many things to consider when selling a home that has been passed down to you, such as the current market conditions and your own personal situation. In this blog...