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Author: Seth Pfaehler

Homebuyers Are Going on a Shopping Spree This Winter

Black Friday and Cyber Monday are over, which means some shoppers have wrapped up their holiday buying. But there’s still a group of buyers that are very active this holiday season – homebuyers.

Experts anticipate the real estate market will see a flurry of activity this winter, and that’s great news for today’s sellers. If you’re planning on listing your home, there’s no need to wait until the spring for better conditions – today’s real estate market is already heating up.

Buyers Have Warmed Up to the Idea of Purchasing This Winter

The past 18 months brought about significant lifestyle changes for many of us, including the rise in remote work, job changes, and even early retirement for some. For many people, it’s prompting a search for their next home now rather than waiting for warmer months.

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), points out how this winter may see a significant number of sales:

“Compared to other past winter seasons, this winter season’s sales activity will be stronger. . . . This winter, there will be more sales compared to pre-pandemic winters going back all the way to 2006.”

You might be wondering: what does strong sales activity mean for you? It means there are likely to be more buyers active in the market this winter – far more than more normal, pre-pandemic years.

In the same article, Danielle Hale, Chief Economist for realtor.com, puts it in these simple terms:

“Sellers can expect to see plenty of buyers.”

The more buyers there are in the market, the more likely it is your home will get noticed. That can lead to a multiple-offer scenario or a potential bidding war. Receiving multiple offers on your home means you can select the right offer and terms for your situation – so you can truly win as a seller when you list your house this winter.

Bottom Line

If you’re thinking about selling your house, you don’t need to wait until the spring. Buyers are ready now. Let’s connect to discuss why selling this holiday season could be the gift that keeps on giving.

What Everyone Wants To Know: Will Home Prices Decline in 2022?

If you’re thinking of buying a home in today’s housing market, you may be wondering how strong your investment will be. You might be asking yourself: if I buy a home now, will it lose value? Or will it continue to appreciate going forward? The good news is, according to the experts, home prices are not projected to decline. Here’s why.

With buyers still outweighing sellers, home prices are forecast to continue climbing in 2022, just at a slower or more moderate pace. Why the continued increase? It’s the simple law of supply and demand. When there are fewer items on the market than there are buyers, the competition for that item makes prices naturally rise.

And while the number of homes for sale today is expected to improve with more sellers getting ready to list their houses this winter, we’re certainly not out of the inventory woods yet. Thus, the projections show continued appreciation, but at a more moderate rate than what we’ve seen over the past year.

Here’s a look at the latest 2022 expert forecasts on home price appreciation:What Everyone Wants To Know: Will Home Prices Decline in 2022? | Simplifying The Market

What’s the biggest takeaway from this graph? None of the major experts are projecting depreciation in 2022. They’re all showing an increase in home prices next year.

And here’s what some of the industry’s experts say about how that will play out in the housing market next year:

Brad Hunter of Hunter Housing Economics explains:

“. . . the recent unsustainable rate of home price appreciation will slow sharply. . . . home prices will not decline. . . but they will simply rise at a more sustainable pace.”

Danielle Hale from realtor.com agrees:

“Price growth is expected to move back toward a normal range, but this is on top of recent high prices, . . . So prices will [still] hit new highs. . . . The pace of price growth is going to slow notably . . . ”

What Does This Mean for the Housing Market?

While home price appreciation is expected to continue, it isn’t projected to be the record-breaking 18 to almost 20% increase the market saw over the past 12 months. Overall, it’s important to note that price increases won’t be as monumental as they were in 2021 – but they certainly won’t decline anytime soon.

What Does That Mean for You?

With motivated buyers in the market and so few homes available to purchase, the imbalance of supply and demand will continue to put upward pressure on home prices in 2022. And when home price appreciation is in the forecast, that’s a clear indication your investment in homeownership is a sound one.

Bottom Line

It’s important to know that home prices are not projected to decline in the new year. Instead, they’re forecast to rise, just at more moderate pace. Let’s connect to make sure you’re up to date on what’s happening with home price appreciation in our market, so you can make an informed decision about your next move.

Advice for First-Generation Homebuyers

The sense of pride you’ll feel when you purchase a home can’t be overstated. For first-generation homebuyers, that feeling of accomplishment is even greater. That’s because the pride of homeownership for first-generation buyers extends far beyond the homebuyer. AJ Barkley, Head of Neighborhood and Community Lending for Bank of America, says:

“Achieving this goal can create a sense of pride and accomplishment that resonates both for the buyer and those closest to them, including their parents and future generations.”

In other words, your dream of homeownership has far-reaching impacts. If you’re about to be the first person in your family to buy a home, let that motivate you throughout the process. As you begin your journey, here are three helpful tips to make that dream come true.

1. Reach Out to a Real Estate Professional

It’s important to reach out to a trusted advisor early in your homebuying process. Not only can an agent help you find the right home, but they’ll serve as your expert advisor and answer any questions you might have along the way.

The latest Profile of Home Buyers and Sellers from the National Association of Realtors (NAR) surveyed first-time homebuyers to see how their agent helped them with their home purchase (see chart below):Advice for First-Generation Homebuyers | Simplifying The Market

As the graph shows, your agent is a great source of information throughout the process. They’ll help you understand what’s happening, assess a home’s condition, and negotiate a contract that has the best possible terms for you. These are just some of the reasons having an expert in your corner is critical as you navigate one of the most significant purchases of your life.

2. Do Your Research and Know What You Can Afford

The second piece of advice for first-generation homebuyers is practical: do your research so you know what you can afford. That means getting your finances in order, reviewing your budget, and getting pre-approved through a lender. It also means learning the ins and outs of what it takes to pay for your home, including what you’ll need for a down payment.

Many homebuyers believe the common misconception that you can’t purchase a home without coming up with a 20% for a down payment. As Freddie Mac says:

“The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”

The chart below shows what recent homebuyers have actually put down on their purchases:Advice for First-Generation Homebuyers | Simplifying The Market

On average, first-time buyers only put 7% down on their home purchase. That’s far less than the 20% many people believe is necessary. That means your down payment, and your home purchase, may be in closer reach than you realize. Keep that in mind as you work with a real estate professional to better understand what you’ll need for your purchase.

3. Don’t Lose Sight of What Home Means to You

Finally, it’s important keep in mind why you’re searching for a home to begin with. Overwhelmingly, first-generation homeowners recognize the financial and non-financial benefits of owning a home. In fact, in a recent survey:

  • 73% of first-generation homeowners say the safety and security homeownership provides is increasing in importance.
  • Nearly two-thirds of first-generation homeowners say the importance of building equity in a home is growing more important as well.

As AJ Barkley explains:

“For many first-generation homeowners and their families, homeownership has a unique importance, given the collective efforts to overcome financial challenges that can often span generations…”

Bottom Line

If you’re a first-generation homebuyer, being prepared and working with a trusted expert is key to achieving your dream. Let’s connect today so you can get started on your path to homeownership.

If You Think the Housing Market Will Slow This Winter, Think Again.

From the opportunity to take advantage of today’s low mortgage rates to changing homeowner needs, Americans have more motivation than ever to buy a home. According to the experts, buyers are making moves right now, creating an unseasonably strong housing market for this time of year.

As we wrap up the fall season and move into the winter months, here’s a look at what several industry leaders have to say about the continued momentum in the current market, and what it means as we head into the early part of next year.

Lawrence Yun, Chief Economist, National Association of Realtors (NAR)

“This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low. The notable gain in October assures that total existing-home sales in 2021 will exceed 6 million, which will shape up to be the best performance in 15 years.” 

Odeta Kushi, Deputy Chief Economist, First American

“So far in November, purchase applications point to another strong month in sales. Still low rates and demographic demand support this strength, even as affordability and inventory headwinds remain.”

The M Report

“The demand for housing in the United States has reached a fever pitch, a trend that opposes the norm of this time of the year when the market cools as the winter months set in.”

Mark Fleming, Chief Economist, First American

“Strong demographic demand will continue to act as the wind in the housing market’s sails.”

What does this mean for the winter housing market?

Buyers are actively in the market, and they’re competing for homes to purchase. With the momentum coming out of this fall, all signs point to the winter housing market picking up steam, making it much busier than in a more typical year. And as we’ve seen in so many ways, 2020 and 2021 were anything but typical in real estate. It looks like 2022 may be joining that list before we know it.

Bottom Line

If you think the housing market will slow down this winter, think again. Whether you’re thinking of buying a home, selling your house, or both – let’s connect to determine if this winter is your best time to make a move too.

Stay informed