Did you know? In January, 70% of home sales across the country ended up in a bidding war. This is the highest rate of bidding wars ever recorded. Needless to say, the current housing market continues to provide significant challenges for home buyers. Although there are significant headwinds for home buyers overall, there is some hope that inventory will improve as more homeowners become comfortable with listing their homes for sale as COVID-19 cases decreases.
As we headed into 2020, most real estate economists predicted home price growth to decelerate this year. We previously saw 18.8% price growth between December 2020 and December 2021 with many predicting this growth to drop to around 11% in 2022. However, these estimates have now been revised to approximately 18% price growth for 2022.
For example, Fannie Mae predicted the median existing home price would increase by 7.9% in 2022. Now, Fannie Mae says the median existing home price will increase from $355,000 to $384,000. This is equivalent to a 11.2% year-over-year increase. As for next year, Fannie Mae is predicting that home prices will rise by a more modest 4.2%. This would put the median existing-home price at $395,000.
Even the most modest of home price appreciation forecasts still present challenges for home buyers. After all, the average American company is planning on giving annual raises of 3.9% to employees this year. Needless to say, this would not even keep up with 50% of the home price appreciation pace. It should also not be overlooked that record-high fuel prices essentially impact the price of everything in an economy already experiencing a 40-year high in inflation. With this said, it is quite likely that we will see more prospective buyers exiting the market as they are priced out. Should we see a sizable decrease in buyer demand, this may lead to home price growth deceleration.
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!