Is It Too Late to Sell My Home In 2022?
Making significant financial moves and decisions like buying and selling real estate can feel like a complicated, daunting task. Buyers hope to make sound investments in properties and neighborhoods that will appreciate over time. Similarly, sellers seek to maximize profit by selling the right property at the right time.
The next logical question may be whether the Philadelphia market ( in neighborhoods such as Brewerytown, Fishtown, Northern Liberties, Point Breeze, and South Kensington) currently favors a buyer or seller.
As the 2022 calendar year heads toward its conclusion, will those trends continue into 2023? Should you be looking to act quickly or play the long game? Does your current housing/living situation afford you the flexibility of waiting for the optimal opportunity, or is the time of the essence? The Somers team considers your circumstances, providing professional guidance throughout your real estate journey.
What’s to Come in the Mortgage Market
There is no doubt we are entering a bit of a period of the unknown in real estate. For the last few years, most areas have seen a significant amount of growth in home values. That's thanks to fewer people moving, with less overall inventory on the market. On the other hand, mortgage rates have been low and slow to move. It was pretty easy to obtain a loan with a decent credit score and income. In many ways, the recent climate has been that of a seller’s market, with quick offers and competitive bidding, even asking over the market price in some situations. That may change.
Here are some things to expect about the near-term future:
- Home prices are likely to stay high for some time. Experts do not predict any type of crash occurring in the coming months that would level home prices.
- Mortgage rates are likely to become more stable, though most will see an uptick in mortgage costs right now. That means, for sellers, some buyers will be holding off purchasing now because of the added cost.
- Supply issues — with limited homes on the market — are likely to continue, though some areas are seeing an increase in inventory.
Mortgage Rates Could Impact Buyers
Home buyers often need the lowest interest rate possible to make the purchase of a home affordable. There is evidence that interest rates are a big factor. Banks will likely continue to make changes to interest rates charged to home buyers.
What does that mean for today's home seller? Monitor mortgage rates both for yourself, if you plan to buy a home now, and from the point of the buyer. Buyers may be fewer, and it may take a bit longer to sell a home if interest rates climb much more.
What to Expect If You Sell in 2022
Many experts believe that the second half of 2022 will be more of a return to the normal of pre-pandemic periods. It is during this time that home sales, home sale prices, and competition may rise.
Selling now could be important if you want to get the best price for your home. There has been some indication that home prices are already slowing their rapid increase. In some areas, price reductions are hitting home listings, which could mean overpricing a home to get higher bids is no longer ideal.
Home listings are retreating too. In the summer months, many areas saw significant growth in the number of homes listed for sale. Inventory became a bit more flush, providing more opportunities for buyers. For sellers, that means more competition. However, that’s turned around a bit. With fewer homes listed in the fall months, that could mean less competition and, as a result, a faster and potentially higher valued sale if you sell in 2022.
The Unknown of 2023
So, should I sell my home in 2023? Some people may feel the desire to put off their home’s sale until next year. Doing so could be met with more uncertainty, though.
Inflation could become an ongoing factor, as could a recession. That could mean a drop in home prices in the coming months to years. While there is some predictability in what is likely to happen in 2022, there are a lot of unknowns about what could happen by next year.
A key factor is home affordability. A 30-year, fixed rate mortgage on a median-priced home today has a $2,000 a month payment. That’s a 53% jump from just a year ago, according to Realtor.com. That's a significant increase, and wages are not growing at nearly that rate. The result is that homes are becoming less accessible to many people, and that could become more obvious in the real estate market during the first portion of 2023, if not sooner.
What’s It All Mean to You?
As a homeowner hoping to sell, there are a few things to consider. First, the real estate market is calming, returning to more “normal” conditions as it was prior to the pandemic. That’s a good thing overall for sellers who price their homes right and don’t anticipate huge bidding wars. Housing availability is still low, which means selling your home in 2022 could mean getting somewhat of a boost in value if you are in a competitive market.
Overall, your best bet is to have a comparative analysis of your area by your agent. That's going to give you a far better perspective of what's to come. For many property owners, there's no benefit to putting off the sale of your home right now. Instead, it's a good idea to take advantage of the current conditions.