The last few years have been quite unprecedented for the real estate market. The housing market surprisingly lacked inventory, home prices were at a record high, while mortgage rates came at some of the lowest percentages in recent history. That is all slowly changing, however, representing a complex and often confusing environment for buyers and sellers alike. Making informed decisions is more difficult than ever before, which is why it’s absolutely crucial to know what the future of the real estate market holds. With that in mind, here are some predictions and tips you might want to consider:
The rise in property prices
With each passing year, housing affordability seems like a more distant and abstract concept. Inflation can be felt all across the globe, mortgage rates are at an all-time high, and home prices only continue to rise, making the dream of homeownership that much more difficult to achieve for many. In fact, the average monthly mortgage payment is nearly 80% higher this year than it was in the previous two, and it’s not expected to drop anytime soon. Unfortunately, earnings can't keep up with these inflated costs either, falling behind around 8.5% of the increase in inflation. Home prices likely won’t be dropping in the near future, only predicted to continue increasing in the following years.
Housing inventory forecast
While home prices do continue to rise, many economists predict that the housing options will continue to increase as well. This year, the inventory of homes available for purchase grew at the quickest rate since 2017, up approximately 30% from just a year ago. This is a great leap and a trend that is likely to continue dominating the market, as the housing sector is moving towards more balance each year. Inventory levels are continuing to increase, thus offering more opportunities to buyers still actively looking for new homes. As sellers take some time to adjust to this new normal, price reductions may also increase in the future.
The housing market isn’t exactly the same all across the globe. For instance, the environment in Montenegro is currently ideal for purchasing property, both for investors looking into new developments and for more casual buyers wanting to purchase holiday homes. Here, Montenegro Prospect agents will assist you in finding the best and most affordable property in the country, thus streamlining the process of searching for and purchasing local real estate. This can be of great help to any investor, especially considering Montenegro’s favorable foreign investment climate. The country comes with low taxes, government incentives, endless tourist opportunities, and simple to obtain residence permits.
A change in career opportunities
The latest trends in real estate aren’t only affecting the housing inventory and prices, but also the job opportunities in the sector. While traditional career paths such as real estate agents are brokers are still quite sought-after, the competition is increasing in this field and making success more difficult to achieve. As a result, new options are gaining prominence. For example, professional house sitting jobs are rising in popularity. This is likely due to the increasing need for individuals to live rent-free, while still providing a useful service in a safe, secure, and trustworthy way.
To purchase property or to wait?
Regardless of the location, purchasing property in any market is always a personal decision. As homes are among the largest investments most people will ever make, being in a strong financial position before making a decision is always important. Across the US, for example, homebuyers often use mortgage calculators to determine their monthly housing costs based on their down payments and interest rates, thus making this financial decision easier to make. You could do the same. Instead of attempting to predict the future of the market, buy based on your realistic budget and true needs. Finding a home you love in a suitable area that fits your budget means it’s a good choice. But if sacrifices need to be made for a house, it may be a bad financial decision.
Tips for buying at the moment
If you want to purchase a home in a hot market, begin by setting a strict budget and make it a point to stick to it. Even with the number of houses for sale rising, you are still likely facing high prices and mortgage rates. The biggest issue at the moment is the disconnect between sellers and buyers. While sellers want to go with the highest prices of previous years, buyers often want to go as low as possible. Although you are getting more breathing room as a current buyer, with the wider array of available options, you should remember that it’s still very much a seller’s market in most countries around the world as you consider your homebuying decisions.
Tips for selling at the moment
For a successful sale in a hot market, on the other hand, finding an experienced and highly recommended real estate agent is key. The best agents will work closely with you and ensure you competitively price your home while also taking offers and questions from prospective buyers. Keep in mind that homes have been falling out of escrow recently as sellers keep demanding the prices of 2021. While the market is still tipped in your favor, the best course of action would be to present your property in the best possible light. A clean space, bright lights, and some clever staging can sell even the most outdated home.
Forecasting can be quite challenging in such a turbulent market. After all, these predictions are just estimates based on known factors that can help to guide sellers and buyers in the current climate. To know exactly what the future holds for real estate, we will simply have to wait.