Real Estate Post COVID-19: How it is Affecting the Country’s Housing Market
The real estate market has changed drastically during the pandemic, and even afterwards. Learn more about what has changed and how it could affect you!
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There is nothing more exciting for a lot of people than getting their dream home. No matter where you want to move to, whether it’s a huge bustling city, a relaxing suburb, or even if you want to own a piece of property and build a home on it in a quiet rural town, it is an exciting decision to make. But then you have to decide on how much money you want to spend on a home, what you want it to look like, and lots more. Making the big move is something many people look forward to doing no matter what because it’s a new chapter to look forward to.
Since the COVID-19 pandemic hit in the early months of 2020, the thought of purchasing a home didn’t cross many peoples’ minds and instead quarantined inside of their current homes, wearing a mask out in public, stocking up on toilet paper, and staying safe. With three different strains of COVID-19 affecting the entire world, in the United States, the housing market suffered drastically.
From increased demand and low supply of homes and materials to build homes, homeowners not wanting to leave their homes without another home to purchase, higher mortgage rates, and lots more, there are many other factors that play into why the housing market isn’t doing as well in 2022.
There is a lot to consider whenever you want to purchase a new home in 2022, so make sure that you understand real estate post COVID-19 and how to go about the new ways of purchasing a home and what to consider when making this decision.
How Have the Prices Changed for Homes in 2022?
Figuring out how much you want to spend on a home is crucial, especially in 2022 after the pandemic!
We know that you’re excited to purchase a home in 2022, but it’s important to pay close attention to the prices and make sure that you find something in your price range.
When January 1st of 2022 came around, were you hoping for a new beginning? I think we all definitely were with the end of the pandemic slowly approaching and just the hope that things would start to go back to some sort of normalcy. Among these people, real estate agents have also been hoping for a new year with a fresh start in the housing market.
There are plenty of factors to consider moving in 2022 with the real estate market where it is currently at and some of the most important things to highlight include how prices of homes have gone up, how the demand of homes is high, but the supply of them is low, and of course, the status of mortgage prices as of right now.
Prices of Homes as of 2022
As of right now, prices of homes have become much more expensive than what they used to be before, which is something that is affecting a lot of people who are looking for a new home, or even to move into their very first home. The price of a home is something that you should definitely consider before making any decisions though.
With increases in wages for individuals, along with the stimulus checks that Americans received during the pandemic, millions of people flooded the real estate market to purchase a new home. With this surge of demand, along with low supply of homes ultimately increased the prices of many homes throughout the United States. Depending on certain areas, some cities sold homes for hundreds of thousands more than they normally would, such as Austin, Phoenix, Las Vegas, and many more.
The good thing is that many real estate economists believe that home prices may begin to slow down. With the prices of homes beginning to lower, mortgage rates are believed to rise, which can in turn sway peoples’ minds on when and what home to purchase.
Housing Inventory and How it Has Changed in 2022
The housing inventory plays a huge role in the sales of homes in 2022, and if it’s the right decision to sell your home and purchase another one!
Are you looking to purchase a new home in 2022, or are you just thinking about buying an older home? No matter what you decide to do, it’s important to know and learn a little bit more about the housing market as of 2022 and how it could greatly affect your decision on where to move to, how to sell your home, and where to purchase a home.
Housing Inventory in 2022
Something else to always consider when it comes to purchasing a home, especially in 2022 is the supply and demand of homes. As of right now, it seems that the demand for homes is at an all-time high, but the supply of homes is really low, so why is that? It has become more expensive to build homes and make repairs to existing homes due to price increases in lumber, materials, and other supplies needed. Getting your hands on these materials and the work that goes into repairing a home, or even building a new one causes the price of the home to rise significantly.
As of right now, the housing supply has dramatically fallen and it has been cut in half to what it usually has been over the years. With almost one million listings in January of 2020, the homes listed on the housing market have been cut down to 400,000 as of January 2022 according to data from the Federal Reserve. On average, it is hopeful to see the housing market grow 0.3% on average in 2022, which is better than 2021, but still very limited compared to the beginning of 2020.
There is also a current demand for homes located in rural areas, and lots of other homes with a lot of space on both the inside and outside that seem very hard to find right now. Housing prices are not only going up in cities and suburban areas, but also for rural areas as well, which many people have also been looking into since the pandemic started.
With many people working from home since the pandemic started, many people have been wanting to get away form the high apartment rent prices and instead purchase a home and even find a beautiful home out in rural areas seems to be difficult too. Many people are looking to experience the increased amount of space, career opportunities, and even take advantage of the lower cost of living, but many people are starting to occupy these areas as well now.
It is also important to note that sometimes it makes a difference what time of the year to purchase a home. For example, homes can be plentiful in the spring, but it could in return be a competition when it comes to putting an offer in to get the house, so looking around that time could greatly benefit you.
New Construction of Homes and What’s Happening in 2022
Know if new homes are being built, how often this is happening, and the labor behind it!
Are you looking forward to moving into a brand new home in 2022? With the high demand of homes in 2022, but the low supply of them, it can be difficult to find a brand new home because they can be being sold right before they are even built. Even finding older homes can be an issue, but it’s important to highlight if homes are under construction as of now to help the high demand.
Since the housing market boomed in 2021, you would seem to think it would be the same, or close to the same in 2022. With the high prices that homes are right now, lots of policymakers and industry professionals are turning to building homes to make ends meet.
Millennials are now starting to look into purchasing their very first home, and many other people are looking to upgrade to a home with a lot of space in it, or just to live in a more rural setting. Luckily, many homes are being built as we speak and have been since way before the pandemic hit, but sadly, the construction of these homes was way behind even before then.
Now, how does this affect the labor to be able to make all of these beautiful homes? In 2021, many businesses were seeing people quit their jobs, but this didn’t affect the construction industry. It actually stayed about the same. Since before the pandemic, it has been hard to keep a job in this industry, mainly because it’s hard to find skilled workers to fit the position.
With this being an ongoing issue since before the pandemic hit, it will most likely continue to be an issue when it comes to continuing to build homes in 2022 since it has been an issue way before then. We hope to be able to see a change in this in the years to come, but for right now, homes will continue to be built, but not at the rate that’s expected.
Has the Process of Purchasing a Home Changed?
See if buying a home has changed since the start of the pandemic to get an idea of how to approach it!
Purchasing a home can seem like a tedious task to do, but if you’re serious about finding a new home to live in a brand new area, then it can actually be kind of fun too! The process of buying a home can seem long and tough, but it’s also to take into consideration how it has changed since the pandemic hit.
It’s important to know how to approach the process of buying a home and the steps that you need to take in order to successfully make a home all yours. The COVID-19 pandemic has actually added some new ways to tour homes and so much more that you should also be aware of too!
The Steps to Purchasing Your Very Own Home
There are thirteen steps that you should be aware of whenever you decide to purchase a home that will help make your process go by more smoothly so you don’t have to fret and worry about what exactly to do, so let’s get started!
- Decide Whether or Not You’re Ready to Buy a Home
One of the most important things that you should keep in mind when purchasing a home is if you’re ready to buy a home. Some things to consider are your income and employment status, your debt-to-income ratio, your liquid assets, or if you have enough money for a down payment, and your credit score and health. You should also consider how long you want to live in one place and also if the timing is right too.
- Figure Out How Much Money You Can Spend on a Home
It’s important to figure out how much money you are willing to spend on a home. This can be easily calculated by figuring out your debt-to-income ratio and you should also consider budgeting more since with a home you will be paying for more, such as property taxes and homeowners insurance. A homeowner calculator can also help you figure out exactly how much you can spend on a home.
- Put Money Aside for a Down Payment and Closing Costs
Remember when we said that budgeting is important? Well, when it comes to purchasing a home, it’s extremely important to have money set aside for down payments and closing costs. A down payment is a one-time payment to put on your house and closing costs, which are payments to close on the house and own it outright.
- Decide Which Mortgage is Right For You
There are many different kinds of mortgages to consider whenever buying a home and it’s important to pick the one that is right for you. From conventional loans, FHA loans, VA loans, and USDA loans, looking into each of them is essential in order to decide what is right for you.
- Getting Preapproved is Essential
Something that is extremely important before you start looking into homes is making sure that you can get preapproved for a mortgage. Your lender will give you a preapproval letter for how much you are approved for based on your credit, income, and much more. You can get this letter by doing a credit check, and by answering questions about your income and assets.
- Find the Right Real Estate Agent
One of the most important things that you need to do is find a real estate agent that works well for you and what you’re looking for. A real estate agent represents you and will help you on your journey to find a home that is perfect for you and help write offer letters for you on your behalf.
If you are looking into moving into a home in the Ohio area, make sure to check out HER, REALTORS® and their list of amazing real estate agents that can work with you!
- Start Your Hunt for the Perfect House
Now is time for the fun part, which is finding the perfect home for you! Searching through homes is a lot of fun and some things that you should consider should be the price, square footage, number of bedrooms, property and real estate taxes, condition of the home, the school district ranking, and lots more. The great thing too is that ever since the COVID-19 pandemic hit, virtual tours have made it even easier to view a home from the comfort of your own home so you don’t have to schedule a tour in-person.
- Make an Offer
Once you have found the home of your dreams, it is now time to make an offer on a home. You have to submit an offer letter in writing including your name, current address, how much you’re willing to spend on the home, and an earnest money deposit if necessary. The seller can either accept your offer, reject it, or give you a counteroffer.
- Get a Home Inspector to Look at the Home You Want to Buy
It’s important to make sure that the home you want is in tip top shape before buying it, so it’s wise to get a home inspector to stop by and check out the property to look for any electrical problems, any serious health hazards that could come from living in the home, and so much more.
- Get a Home Appraisal on Your Current Home
You should also think about the home that you wish to purchase by getting it appraised where a real estate appraiser will come and determine the fair market value. This is ultimately a great thing to do because it can reassure you the price you agreed to pay for is fair.
- See if You Can Get Repairs or Credit
Unless you’re purchasing a new home, you may be getting a home where there may be potential repairs that you will have to make upon moving in. Once you get an inspection done on the home, you should consider asking for a discounted price to afford the repairs, request that the seller give you credit, or cover some of the closing costs of the home, or just see if the repairs can be made before you move in.
- Walk Through Your New Home Before Closing on it
Getting a new home is super exciting, but it is essential that you do a final walkthrough of the home before you fully close on it. Why do this? This is important because then you can check and make sure that the seller has everything in order before you move in.
- Close on Your Brand New Home!
The last and the easiest step may be to close on your brand new home! This will tell you what you need to pay upon closing on your home and it summarizes the details of your loans. You will sign a settlement statement which also lists all of the costs related to the sale of the home. Then it is all yours!
Luckily with the COVID-19 pandemic, the process of purchasing a home hasn’t changed, but made things easier. With virtual tours, e-signing important forms and documents, and lots more, a lot of the process of buying a home can be made virtual instead of all in-person, or with hard copies.
How Real Estate Agents Are Handling the Housing Inventory Issue
Not only are people who are looking to purchase a home struggling, but so are real estate agents too!
While many individuals and families are struggling to find the perfect home to move into post-pandemic, they aren’t the only ones being affected by this issue. Real estate agents are also being affected as well due to the high demand of homes, but the low supply of them.
Real estate agents are hopeful that things are starting to turn around with the increase of homes being bought with the slow decreasing of the prices of them. With decrease of the prices of homes though comes higher mortgage prices. They also believe that the demand for homes will continue to stay right where it has been in the past couple years, which will not only be helping them, but the people looking into purchasing homes as well.
Agents are also encouraging people to consider the current home they are living in as well and to start making repairs on their home so it will help their home sell a lot faster than without the proper repairs. Many buyers often look for homes with the least amount of repairs to them, and by making the essential repairs, it can help you to sell your home faster in order to find your new home too.
Finding a new home is an exciting journey to start, but since the COVID-19 pandemic, it has been a hassle for many people. With many people looking to purchase a new home, but a low supply of them, it can be stressful. The COVID-19 pandemic really changed a lot about the housing market, but luckily, things are starting to get back on track!
If you are looking into purchasing a home in Ohio or Kentucky, consider reaching out to HER, REALTORS® and see what they have on the market to find your dream home!
Discover your dream home in German Village, OH.