As we begin 2022, there’s a lot happening in the Wilmington area housing marketing.
From the pandemic influences to general market growth to the increase in Wilmington’s population, there are a wide variety of factors impacting prices, supply, and demand.
Is now a good time to buy or sell your home?
It all depends whether 2021’s market trends will continue into the new year.
Our 2022 Housing Market Predictions
Because we can’t yet put COVID-19 in our rearview mirrors, the pandemic’s housing trends will likely continue. Our realtors suspect home prices will remain high for the foreseeable future — at least into the first part of 2022.
Here’s what we expect to happen:
- Prices, appreciation, sales, & mortgage rates will most likely increase by several percentage points.
- Inventory of new and existing homes will probably continue to be pretty tight, perhaps increasing slightly in some areas.
- Demand for new and existing homes will almost certainly remain strong, as about 45 million millennials approach the key home-buying age (U.S. Census Bureau).
In addition to financial, supply, and demand factors, the housing market has changed in some other significant ways.
As you may have experienced firsthand, many workplaces were forced to rely on remote work possibilities as COVID-19 hit the streets. For many companies, the newfound workplace flexibility is here to stay.
How does this affect the housing market?
Well, if people don’t have to “physically” go into work, there’s no real reason for them to live close to their “physical” workplace. This opens up the door for them to move…honestly… wherever they want!
We may see fewer people wanting to live in big metropolitan areas and more people moving to areas with a smaller population density. We may see people choosing more affordable living options or even moving to those places they’ve always wanted to visit.
“There’s a lot of people moving here because they realized they could work from anywhere,” said Kevin McKoy, Carolina Beach Network Real Estate Agent. “So, they might have gotten out of Raleigh or Charlotte or a bigger city to come near the beach — Wilmington, the beaches — and live here. And when you can sell for a Raleigh price, for instance, it’s quite a deal.”
Wilmington area housing prices aren’t as high as the near million dollar prices of big cities like Raleigh and Charlotte, McKoy said. In these larger North Carolina metropolitan areas, buyers are spending anywhere from $800 thousand to $1 million on modest homes
This is a major reason McKoy doesn’t expect Wilmington area housing prices to decrease anytime soon.
In addition to the new housing possibilities of remote work, COVID has afflicted the labor market with its own supply and demand challenges. Namely, increasingly competitive wages may very well give more people the resources they need to afford the steep home prices.
Additionally, homebuyers are growing a stronger preference for suburban homes and larger, more spacious homes. After all, they need the space to conduct their remote work duties.
However, with the sparse inventory of homes, McKoy says there’s not much room for buyers to be very picky. McKoy is seeing more and more homebuyers compromise on their home preferences — just so they can get a roof over their heads. If buyers are unwilling to sacrifice a few ideal features, it can take years to find and secure the right house!
How the 2022 Housing Market Affects YOU
What cues should you take from these 2022 housing market trends? It depends on your goals:
If you’re looking to buy a home…
You need to define your budget carefully. Time and time again, potential homebuyers are bidding on homes that end up selling for hundreds of dollars over the asking price. Between the increased prices and mortgage rates, you need to budget high.
And nowadays, you’ve got to make decisions quickly. Once a home is listed in the market, it could be snatched up in just 6 hours, McKoy said. There’s no time to stall.
“I’ve got a handful of buyers now — one of them is looking for a condo at the beach, one’s looking for land, one’s looking for a house in Wilmington in the 300 range, and one’s looking for a house in Wilmington in the 850 range,” McKoy said. “There’s hardly an option.”
Regardless, you should NEVER buy a home unless you feel comfortable with your loan and the amount you’ll pay month-to-month.
Do you remember what caused the 2008 housing crisis?
Too many people taking on risky loans they couldn’t afford. Fortunately, our realtors look out for YOUR best interest. We’ll help you determine what you can safely afford. Just give us a call at 910-395-4100.
If you’re thinking about selling…
The market is in a great spot for you right now. Assuming it’s in good shape, your home will sell quickly. Plus, with the high demand, you’ll probably be able to charge a hefty price.
Your main challenge? Finding a new home.
You’ll have the greatest advantage if you don’t necessarily need to move into a new home right away — whether that means staying in your old home until your new home is ready, renting for a short period of time, or even living with family or friends for a few months.
NOTE: If you want to sell your vacation home, you should expect a significantly cooler market than the 2021 uptick.
If you’re a renter…
As you may already be noticing, monthly rent prices are growing, as well. Rent has been increasing slowly since the 1990s, but it jumped extraordinarily high in 2020 and 2021 (in part, due to the pandemic & partially a response to the high cost of buying).
In fact, rental vacancy rates have dipped as low as 5.7% across the United States, a significant drop from the usual 6.8% to 7% rates.
If you’re investing…
The booming marketing means you’ll experience exceptional returns. And because monthly rent prices are driving so high, rental property investments can mean even greater yields throughout the year.
Have we answered all your housing market questions?
Whether you’re a renter, investor, buyer, or seller in the Cape Fear Region, our team of real estate experts is here to help you determine your best course of action. To get in touch with one of our realtors, give us a call at 910-395-4100.
