Leticia Shifflet, executive officer, Cache Valley Association of REALTORS®
Since the onset of the COVID-19 pandemic, real estate markets, both globally and nationally, have experienced dramatic change. Home values continue to increase as the demand for housing grows. Since March 2020, home prices have increased by 25% in most areas, making home sales their best in the last 15 years. Coupled with low-interest rates, this demand has provided substantial equity for homeowners.
This demand for new housing (or a change of housing for thousands of current homeowners) combined with low-interest rates, has created an onslaught of competition for potential home buyers. The demand for new and different housing has also boosted new construction, which saw over 800,000 newly constructed homes being sold last year. Those involved with the building process dealt with both the increased cost and reduced supply of materials, but even those obstacles didn’t seem to slow production and demand.
With so many changes taking place in financial markets around the world, in the country, and within Cache Valley, investors and homeowners are now looking to real estate as a hedge against inflation. Rising rates and inflation pose challenges as mortgage rates rise. The value of an experienced REALTOR® is realized — more than ever — as buyers and sellers face the constant changes taking place within the market. The knowledge and understanding of these factors make a noticeable difference in the success of real estate transactions. To continue to make wise investments and decisions regarding homes and properties, both buyers and sellers are turning to the expertise of REALTORS®.
With rising costs and rates, potential buyers looking to purchase a home might be persuaded to wait for a shift in the markets, but both private sector and large apartment owners accelerated rent in the late months of 2021, and the rising costs to rent a home or apartment are set to continue to rise year after year. Not only is rent on the rise, but finding a space to rent has also become more difficult as current rental vacancy rates are at a 40-year low.
With these prospects, waiting may not be the best game plan. While existing home sales are expected to fall a couple of points after massive cumulative growth, home prices are not expected to experience that same fall. Instead, single-family properties are expected to rise by 4% nationally. With this information in mind, now is the time to make your move. Contact an experienced REALTOR® to guide you through the details and make your dreams and investments successful.
Whether you are a participant or simply a spectator of the growth of local real estate markets, it’s been an exciting ride!