The Impact of Covid on the Real Estate Market
Over the past several years, the real estate market has been exciting, volatile, unpredictable, and everything in between. Anyone saying that they could have told you the events of 2020, 2021, and 2022 before they happened; or even predicting which is going to happen next, in 2023 is being incredibly dishonest. The events of covid in 2020 heavily impacted the real estate market by limiting building materials, constricting supply, and increasing demand.
Factors that Increased Demand
Fewer people desired to live with numerous roommates, thus decreasing the number of people living under one roof and increasing the number of homes needed to house a certain number of people. Teleworking also grew the demand for housing by increasing the need for a home office. People spent more time at home and prioritized the things that their homes offered and resorted to either drastic home improvements or moving homes. TheCovid “Baby Boom” also played a significant role as some sources have reported as much as a 6.2% increase in birth rates in 2021
2021 and 2022 Real Estate Market
The latter part of 2021 and all of 2022 cultivated a real estate market that had very few homes for sale but a lot of people that wanted to buy a home. Historically low-interest rates also facilitated this massive drive in demand. Many people were able to sell the home they had, cash out a considerable amount of equity, and make a significant upgrade, all while keeping their mortgage payments the same.
Inflation and Interest Rates
Fast forward to 2022, inflation is becoming a nationwide issue, and the most effective way to combat that is to increase interest rates. Therefore, interest rates rise, but prices stay the same.
Current Market Predictions
While most real estate markets did not see prices increase significantly (or at least in comparison to the previous two years) the ripple effects of COVID have kept supply low and demand high. While many experts predict a wide variety of things to happen over the next 2-3 years, one thing we know for certain is that those events are nearly possible to foresee.
Advice for Real Estate Buyers and Sellers
So, it is our advice to all of our clients to enter the real estate market when the time is right for you! Your life events will most dictate your need for housing. Whether that is to improve, relocate, upsize, downsize, or invest, all of these factors are what determine when is a good time to buy for you. There is never a “good time” to buy or sell for everyone. So, reach out to a real estate professional that can help you understand the current market and use that information to make the best decision for you at that particular time. And if the factors in the current real estate market make it a less-than-ideal time for you to buy or sell, then we can help you be as ready as possible for when that time comes! Always make the decision that is best for YOU. Not a friend, neighbor, or family member. Because timing the market, based on its highs and lows, is nearly impossible to do.