Welcome to 2022! Could this year be the year you purchase a primary or secondary home in Winter Park? Are you looking for an income property? In order to be an informed buyer (remove /seller), its good to be knowledgeable about the current market. To help you make an educated decision, weve compiled a fewnotable Winter Park real estate market trends for 2022. Read on to learn more! When youre ready to sell or purchase a home in Grand County,check out ourResources forBuyersandSellers. Its a great place to begin your journey to buying or selling a home with Real Estate of Winter Park!
Top Winter Park Real Estate Market Trends for 2022
According to the Natl Assoc of Realtors (NAR), 6.12 million existing homes were sold in the US in 2021. This is the highest number of existing home sales since 2006.
What does this mean for buyers/sellers? Despite low inventory, we are still on an upward trajectory in the real estate market across the country. There are no real indications that we are facing a crash like we did ten years ago, especially in a state like Colorado, where the population growth has been exponential over the past decade.
Chief Economist at NAR, Lawrence Yun, predicts that home sales will slow slightly due to lesser inventory.
What should buyers/sellers expect as a result? It will continue to be a Sellers Market. Buyers who want to purchase need to be ready with down payment funds, a pre-approval lender letter, and a cash offer will always retain an advantage. Leveraging assets is helpful to obtain cash, but it presents a risk if and when the market does adjust.
Interest rates are expected to rise in 2022 but still should remain at record lows; NAR predicts a 3.7% 30-year interest rate as the high for 2022. Some other economists feel it could be between 3.5% and 4%
Basically, this means that although interest rates are going up, real estate is still a relatively sound investment at this time because 3.7% is still historically low.
2021 ended with the lowest month of inventory (Dec) since 2006 across the country.
What is so significant about low inventory? Low inventory means fewer home sales but also means that when a seller does list their home, they will get top dollar for it. This also means that many buyers may shy away from putting offers into the homes that do come on the market to avoid a bidding war. Multiple offers will continue to be prevalent in 2022.
Second homes and investment properties will face additional lending fees imposed by Fannie Mae and Freddie Mac starting April 1.
This is a Heads-up to our second-home buyersyoull encounter more fees soon when buying property. The cost of borrowing money will increase in second home/investment loans, so purchasing power decreases.
1031 exchanges are currently OFF the chopping block, but this is always something to watch per the current presidential administration.
A 1031 exchangeallows you to avoid paying capital gains taxes when you sell an investment property and reinvest the proceeds from the sale within certain time limits in a property or properties of like kind and equal or greater value. It is significantbecausepeople perform 1031 exchanges to defer a tax burden and getting rid of this ability would have Capital Gains implications. In our opinion, this is damaging to the second/investment home market, where folks defer Capital Gains tax but still are cycling money through the economy, which is essential to a robust real estate market and the overall economy.
In Colorado, supply in second-home areas are still at record lows for existing home sales, development/construction is prevalent in all communities trying to fill demand, but we are still not meeting current demand
What does this mean for buyers/sellers? Demand is strong, but supply is low, which still favors sellers. Home sales are down because of a lack of inventory. Development/construction is slow-going for many reasons, including supply chain issues, lack of materials because of the strong demand, thinning of the labor pool, etc. This means that prices will remain high because it is hard to determine, in this uncertain time, when the supply will meet the demand. With this said, it seems we are leveling out a bit compared to a year ago, as there is only so much a buyer will pay for a property regardless of the low inventory.
Curious to Learn More?
Contact our team to get started on your buyer/seller journey. Wed be happy to answer any of your market questions and help you make the best decision for you and your family!
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