When it comes to investments, only a few have the stability that real estate offers. Not only is it a great investment vehicle, but it also gives you a place to settle down, grow roots, and create memories.
If you’re in the market to sell your property, it’s important to know which trends significantly impact prices. Knowing where the industry is headed is half the battle when helping you get a buyer for your property.
Trend #1: People will be more open to moving away from cities
Due to the COVID-19 pandemic, remote work has become a lot more prevalent as the entire world battled the spread of the disease. The remote or hybrid work setup is one of the more notable changes that will continue to matter even after COVID-19 is fully under control.
Due to the increased flexibility of work arrangements, more families are looking to move out of cities and move to smaller neighboring towns to live and work in. This will skew the housing prices in towns around larger cities upwards while making homes in the country’s major metropolitan areas more affordable.
Trend #2: Mortgage rates play a major role in house buying decisions
The current state of mortgages is in favor of prospective homeowners. The slight economic decline before the pandemic created a more friendly environment as the real estate industry received an impressive $470.7 billion investment to keep it afloat. The pandemic also brought mortgages to incredible lows.
However, these rates didn’t last long. The average mortgage rate is at 5% as of June 2022. Add the fact that buying pressure slimmed down the inventory of homes, causing a 20-30% increase in home value. Together, this makes first-time buyers think twice about cashing in on a property they’re interested in.
Mortgages will continue to rise by .25 to .5 a quarter as the inventory of available houses continues to shrink. Many housing experts project lower loan applications due to the rising interest rates, which spurns down housing demand. This will increase the supply and unavoidably bring the home value back down.
Trend #3: Millennials have specific requirements for homeownership
Millennials are finally becoming homeowners because many of them now have stable jobs that pay up to on average $88,200 per year. This gives them enough leverage to get a decent loan for residential real estate.
Low interest rates also drove millennials’ intense desires in homeownership over the past two years. The housing market situation allowed them to afford homes appropriate to their income.
Millennials are particular about what they want in their first home, however. While they understand that the sensible choice might not be their dream home, they want to find a listing in a safe and convenient location. They also want to live comfortably in their first home.
Trend #4: House prices could eventually hit a plateau
While the entire world is still recovering from the pandemic, the overall housing market has not slowed down. The median price for a home in Seattle is currently at $850K, and it is expected to continue to increase.
However, there’s also the argument with more families still opting to move out of expensive cities, property listings could eventually outnumber willing buyers. Also, along with higher interest rates, there could be more buyers willing to wait till the rates come back down. This will inevitably drive prices downwards.
For big cities like Seattle, the price drop won’t be sudden. The demand is still high for homes in Seattle, but there is a real fear of a recession impacting the housing market a year from now. With stocks hitting all-time lows and newer investment vehicles like crypto currencies sinking over the past six months, housing prices could be affected soon.
Get Ahead of Residential Real Estate Trends
While people are still looking for the perfect Seattle home, lesser demands and rising mortgage rates will make it challenging for homebuyers and sellers to close residential real estate deals.
If you need the help from a reliable real estate company to sell your property in the greater Seattle market, visit our site Blue Pacific Real Estate and contact us to speak with one of our realtors. We’d love to hear from you.