The US real estate market in summer 2022 is cooling down after the hottest couple of years. We are seeing big increases in interest rates all around the world and home sales have recently been trending down towards 2019 figures. Would-be homebuyers are exhausted and confidence has reached all-time-low in June 2022. Inventory is slowly starting to rise again, however is it still far from pre-covid levels. There are a ton of real estate marketing predictions, but pretty much everyone want answers to the big answer: Is the US real estate market going to crash in 2022?
It is still a Seller’s market
This has been one of the craziest times we’ve seen in Real Estate. There have been many cases where buyers were lined up outside of homes waiting for their moment to view a listing. Buyers making sight-unseen offers on homes just to make sure they can win the bid and secure homes. This is truly a seller’s market real estate. Not to mention the increase in the price of lumber and other supplies which has driven the cost of new homes up as well. Houses are selling well above the asking price in many circumstances because people are desperate to win the bidding war. Additionally, companies like Homelight and many iBuyers are making it super easy to sell a home.
Real Estate Statistics
Here are some important real estate statistics I was able to find. According to the National Association of Realtors, the median home price in May was $407,000, up 14.8 percent from last year. With the growth rate slowing down a bit, this could be an indication that the housing market is beginning to shift. As a seller’s market, there are many homeowners who probably wouldn’t have put their home up for sale that have done so just to take advantage of the extra cash available.
If you aren’t aware, there are companies that use technology to make an offer to purchase your home in an instant. It is known as a simple and more convenient way to sell your home. They do the heavy lifting for you (marketing and reselling). The resurgence of iBuyers has had a great impact on the current market. Mike Delprete of mikedp.com reported that iBuyers bought more houses at higher prices in Q2 of 2021 than any other quarter. This hot market seems to be fueling the growth of this market segment. This will surely be another area to watch.
Another interesting new solution to the home buying process is from a company called HALO. They are trying to level the playing field of homeownership by paying cash for your ideal home and then leasing it to you while you work on becoming qualified for a mortgage. Their statement is “We create Homeowners” which is the goal of the company. It’s such a promising venture because it’s really shifting the landscape of buyers and helping those who don’t qualify through traditional means. They have partnered with real estate agents, mortgage lenders, and even credit counselors to make dreams come true. I’m so excited to see how this continues to shape the real estate market.
What’s next for the US market?
So the question is what’s next? What is in store for the rest of the year and the beginning of 2023? Of course, no one has the exact answer, but let me share some statistics (from the National Association of Realtors) that I’ve found that may point us in a direction. Compared to one year ago the average days on the market decreased from 24 in June of 2020 to 17 in June of 2021 to 16 in May 2022. The median existing-home sales price rose at a year-over-year pace of 23.4%. If inflation turns out to be “real” and sustained, investors might actually secure their investments by purchasing more real estate which will, in turn, raise prices.
There is also a push in the appraisal industry to fight against the racial bias that has negatively impacted so many. If we see improvements in this area, it should increase average prices overall.
Housing boom is over?
In a recent article on cnbc.com, Diana Olick stated that the “Housing boom is over…” you can read more HERE. Whether this will truly be the case has yet to be seen, but we know that the market has to slow down at some point. Maybe June was the tipping point for that slowdown.
It’s been a wild ride for sure and if we’ve seen the turning of the tide, there is still a long ride until we flatten out. I will surely be watching, learning, and listening to see what’s happening with the market and how it impacts every aspect of real estate sales.
Real Estate Info
Stay tuned to what’s happening next in the Real Estate Market. Here are some of our favorite sources for Real Estate information.