John Burgess, broker/owner at Camden Hills Realty, offers a snapshot of topics and trends, which he believes will define the New Year. Here are the key categories that he said will likely impact home sales going forward.

Inventory

A lack of inventory will continue to plague the markets & frustrate buyers
Low inventory levels will help hold up prices to the seller’s advantage
Real Estate Agencies will need to rebuild inventories

Home prices

Home prices are forecasted to appreciate in the 5% to 8% range
There is no indication that prices will fall back
Added equity in homes will protect homeowners from a “crash” in values
Demand will be stable providing further support for current home values
High valuations will affect affordability at some levels

The Federal Reserve

Inflation has gotten the attention of the Federal Reserve
It is projected that it will raise interest rates three times in the year
Mortgage rates will follow, increasing to 3.5% to 4%
The debt-to-income level ratio to secure a mortgage will be a higher hurdle
Inflation
Inflation is something we will live with for this year and possibly beyond
The cost of new home construction, materials & labor will climb
Inflation will touch everything “house” related

The Market

High-end properties will sell as normal, affected only by inventory and selection
Vacation and second home markets will stay in the game
Trade-up residential mid-market buyers are inclined to move to the sideline
Boomers are leaning toward aging in place
Millennials (26-42) are buying homes and will drive the market for years to come
First time buyers will feel the pinch of rising interest rates and rising prices
The market is still to the advantage of sellers
Buyers are frustrated as houses go under contract before they can act
Buyers are equally frustrated by competition — cash is king!
Over-asking-price and multiple offers will cool, opening the door to negotiations
The pace of the feeding frenzy will slow

Lastly, Anyone’s Guess

Our “pandemic lifestyle”
Confusion with hybrid-remote work models and policies
Labor shortages; supply chain issues, disruptions
Politics & geo-political climates

Burgess advises, whether buying or selling the best recommendation is to work with a knowledgeable local agent who understands the market and can provide the support buyers and sellers need reach a successful sale or purchase.

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