Can you believe it’s already 2022 and we are going into our third year of the coronavirus? If you are like me, you may be wondering what is in store for us this year. Sadly, I don’t have a crystal ball so, I’m not sure how this year will turn out. However, we do have many experienced agents that know what to look for in a changing real estate market here in East Central Indiana.
Look Back: 2020 and 2021 Real Estate Market Drivers
Before we get to 2022, let us go back to 2020 and 2021. The last two years were ones for the real estate market history book! They were record years for American Heritage Realty and for the housing market in general. Our average days on market have continued to drop. Many times we had buyers ready with offers the day the home was listed.
There were a few things happening at once that helped to fuel the local real estate market.
2020 and 2021 East Central Indiana Real Estate market factors:
- Limited number of homes on the market – At the start of 2020 there were fewer houses on the market but, as covid began to take hold many sellers decided to hold off listing their homes. Visit our Properties Page to see what’s available now.
- Mortgage Forbearance Programs – When the Government shut down the country in March/April of 2020 they knew as people lost their jobs homeowners might get behind on mortgage payments. This began a snowball of forbearance programs that extended through June 30, 2021, to help keep homeowners in their homes and keep banks from foreclosing. This was a huge relief to millions of homeowners but, the other side of the coin was fewer homeowners were in a position to sell or buy.
- Threat of High Rates – Many homeowners had secured low rates in either 2021 or 2020 and did not want to lose their low rates when buying a new home. Though we continued to have low rates in 2020 and 2021, there was a fear of rising rates this too fueled a buyers market. Buyers wanted to buy before the went up and sellers were reluctant to lose their current low rate.
- Fewer New Construction Homes – Most of us experienced supply chain shortages at the grocery store but the new build housing industry was hit hard. The lack of supplies and workers slowed down new construction, especially in counties like Wayne.
Just like we all learned in economics 101 in high school, supply and demand impact pricing. We had buying demand but, not enough properties listed to meet that demand, which in turn forced prices higher.
So, what’s in store East Central Indiana real estate market? We are making a few predictions with our list of 2022 real estate market drivers.
2022 Real Estate Market Drivers
- Millennials Will Drive Purchases – Millennials are now in their 30s and are ready to buy their dream homes while rates are competitive. Many millions changed jobs over the last few years resulting in higher wages because of the tight workforce. These higher wages will help fuel new home purchases.
- Rates Expected to Rise – Danielle Hale, chief economist at Realtor.com expects rates to rise to 3.6% by the end of 2022. However, even at 3.6%, that’s still a very competitive rate. The average mortgage rate in 1990 was 10.13% and fell over 8 years to reach 6.94% in 1998. Buyers will want to secure a new home before the rates begin to rise and this will drive sales early in 2022.
- Hybrid Commute – As the country gets a better handle on Covid, full-time work from home will give way to a hybrid model. People are more likely to commute longer distances for a few days a week. This will make East Central Indiana even more appealing to those that work in Indy but want to live in a lower-cost area.
Considering Buying, Building, or Selling? Here’s Our Advice
If you’re a prospective buyer, we do not believe home values will decline. So if you are waiting for home prices to decline, don’t stay on the sidelines. You may miss the deals that are available now. If you are a prospective seller, we believe these key real estate market drivers will keep values increasing. They are likely not to increase at the pace they did in 2021 but, it’s still a great time to sell.
If you’re looking to build a home, we recommend you talk to a mortgage lender to find out what you can afford. We’re seeing a little bit of sticker shock when someone sits down with the builder to see how much it costs to build a home right now.
About American Heritage Realty
Since 1977 American Heritage Realty has been keeping our clients’ best interests in mind. Our knowledgeable and experienced real estate brokers and agents have assisted buyers and sellers for over 40 years.
Buying and selling a home requires knowledge, but it also requires trust. Our clients can trust that all of the agent’s and broker’s work is grounded in our team’s mission. Our mission is to provide the most professional, informative, loyal, and dedicated service in the industry. We are dedicated to a modern experience of buying and selling real estate. We are the people you will want to know and the agents you can trust.
If you are interested in buying or selling in East Central Indiana contact us today at (765) 825-1103.