As each day passes, the housing market varies ranging from crashes to record peaks. This new year that we have just entered includes new possibilities of all sorts. However, changes are happening currently that could affect your property.
Seasonality Change of Property Value
One of the most important things to take note of is seasonality, through different months the market changes naturally because of our lifestyles on average. During the months of May, June, July, and August the prices of homes increase. And, around the months of October, November, and December prices drop.
Property Closures Effects & Updates
To begin with, there have been around one hundred thousand closures in 2022. Nearly a decade ago; 2.9m properties were closed in 2010. This led to a break of the record for the home price crash of 33%.
The closures currently have affected a -2.6% in November when compared to the previous November (this is the most updated and recent information available). While this may sound like a small number a house price with 1.4m could now only be valued at 1.36m. As the numbers get bigger, the larger the drop becomes.
However, currently, there are still quite a large number of sellers on the market with the help of real estate agencies attempting to sell their properties and assets.
Current Statistics of The Property Market
The statistics of the market are always changing and here is some of the newest news. This includes the supply amount, sales, and a few other categories.
On one hand for the supply amount, as of the recent past November, there are approximately 1.5m homes for sale. That number compared to last year has increased by 8.3%. On top of this, 23.8% (361,304) of those homes are recently listed for sale. Although, the new home’s quantity is lower than the previous year by a whopping amount of 25.7%.
This means new inventory and supply are coming however; it’s not enough to have a dramatic impact (flood).
However, with all of this, buyers are getting more out of the market each year; and it is becoming a great place for buyers. 26.4% of homes are getting sold above the listing price; which is a dramatic -17.9% compared to the previous November.
Reminder: These are the average statistics, thus, they could vary depending on where you live.
Inflation and Interest Rates
As we all know inflation in the few years has skyrocketed and because of that was the Federal Reserve. However, recently they have begun changing methods and attempting to fix it. Their current plan is to increase interest rates. It started at around a 3% mortgage rate and is 6.6%.
This November compared to the previous November decreased 35.8% by the number of homes sold, this is a result of higher interest rates. On top of this, it’s also proof that the market is slowing down.
This plan is working; however, we aren’t sure if it is the right move. Because higher interest rates decrease demand; thus it’s going to slow down the real estate market. However, this won’t change prices since that caused to have fewer sellers and demand. Ergo, equaling it out.
Overall, all these add up to each factor of how your property could become ruined and you could be in the market for a long time. If you want to sell your home, you have to be aware of all the different parts of the market which include: inflation, interest rates, and seasonality change.