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The State of Real Estate 2022 vs 2021

This contrast in market condition and trend has created the perfect juxtaposition. The real estate market was on an all time high in 2021. The median home sales price was up by 16.9% compared to 2020. The highest it has reached since 1999 as per National Association of Realtors. The major reason behind this drive was the pandemic. More and more people were moving from cities to suburban areas to work remotely. Tight inventory due to construction affected by the pandemic further drove the prices. Buyers were shelling more money than the asking prices, triggering bidding wars all over the United States.

Fast forward to 2022, inflation started tightening its grip, driving up the cost of construction. The rise in mortgage rates along with inflation will set back demand. Most likely, bringing it down to pre pandemic levels. Mortgage rates have breached the 7% mark in the past few weeks. Signing of contracts for brand new homes has also decreased drastically to 31% year-over-year in September as per data by the National Association of realtors. Industry analysts expect the home prices to fall by 7% till the end of 2023, before the market stabilizes.
 
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he positive side is that this fall in demand will replenish the inventory. Tight inventory also indicates that the market is not going to crash due to lack of surplus. Experts think this trend will help the buyers in the long term, as more inventories mean more options. Buyers will have the opportunity to negotiate prices and get better deals.  However, further increase in federal rates could act as a party spoiler next year.

The good news is that the inflation rate in October was below the forecast. A sign that the federal rate hike has helped in getting a hold of the situation, but it’s not all bright and glee yet. As per CNBC borrowing costs are expected to keep increasing for the foreseeable future.

 

 These are tricky times to invest in the real estate market, however that doesn’t mean there is a lack of opportunity. GN Management has a highly competent team that can help you to increase the value of your property and cash in at its perfect junction in time. Renovation, ground up construction and construction management are our area of expertise. Contact us now to get a free consultation regarding your property.

GN’s expertise began in real estate residential development and has expanded to include a range of multifamily, commercial, and mixed-use properties. GN is well-known for our unique ability to discover areas with the greatest potential for overall growth and success. We ingrain ourselves within the area, working to create relationships and opportunities that will be mutually beneficial for our residents, tenants, and neighbors. As long-term asset holders, we equally balance design and quality with budget and scheduling to create spaces that exude excellent craftsmanship while exceeding investor and stakeholder expectations