Keeping up with the latest real estate trends is an important part of determining how to meet the needs of sellers and buyers. Which trends are expected in the fourth quarter of 2022?
Focus on Digital Solutions
Technology has played a big role in the real estate industry during the past couple of years. This trend is expected to continue as more agents turn to virtual staging, 3D tours, and other digital solutions to help home buyers and sellers. These solutions make it more convenient for buyers from other cities, states, or even countries to explore homes they might be interested in purchasing. Digital solutions can also streamline the buying and selling process, making it less stressful for sellers and buyers.
Housing Inventory
A low supply of available housing on the market contributed to the fierce competition among buyers in the real estate industry last year. Housing inventory is still low overall, which is partly due to current homeowners refinancing and locking in low-interest rates rather than selling. A low number of new builds is another factor contributing to low housing inventory. Ongoing supply chain issues are making it more difficult for new builds to be constructed, resulting in fewer properties for buyers to choose from.
Lowering Home Prices
Home prices are starting to drop after last year’s home-buying frenzy. Even with interest rates rising, there are still many buyers looking to purchase a home in today’s market. In some cases, buyers are eager to buy a home instead of dealing with rising rents.
According to the California Association of REALTORS®, buyer demand is dwindling as mortgage rates rise, lowering consumer spending power. Unfortunately, with the new inflation reading coming in high, the Feds will mostly likely raise interest rates again at their next meeting.
The Forecast
The % of consumers who believe home prices will rise is in the low single digits, as it has been since June 2022. C.A.R. members have indicated that reduced demand in conjunction with a lack of listings keeps inventory fairly tight. According to the most recent monthly REALTOR® survey, the percentage of agents who have sellers who are hesitant to list their home has been rising upward since May, reaching its second-highest level this year at 36% in October.
REALTORS® polled over the last month are becoming less hopeful, and buyers and sellers are still adjusting to the new market climate. Since April 2022, the percentage of REALTORS® who believe sales will increase in the foreseeable future has been steadily falling, reaching only 4.6% in October. It would be interesting to find out where in California these 4.6% of REALTORS live.
One positive note is that the market has become less competitive, and more sellers are willing to negotiate and offer buyer incentives. Despite a modest recession forecast for 2023, the long-term prospects for continued price growth in California should continue to attract buyers who still qualify at higher rates but have been sidelined during the previous two years of frenzy.
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