- Improving economic fundamentals: The economy has picked up steam and produced a banner year for the real estate industry in 2021. The GDP this year was higher, and is trending lower, resulting in some lower consumer confidence due to the COVID-19. As you can see people are not moving around they are staying home even as the shut down has been stopped. However, as the year comes to a close and we enter into 2022 we expect lower sales and lower consumer confidence due to a loss of a lot of families loosing income. The job market is struggling to get to where it was in early 2020.
- Historically low mortgage rates continued through 2021 and possibly 2022: Mortgage rates remain low despite the end of quantitative easing this year. Global weakness at times, along with a high rate of foreclosures and short sales- encourages those capital and good credit to buy, buy, buy before rates increase. However, it is still a sellers market which means that home values are still higher than the demand. What use to be location, location, location is not as savvy as leveraging cost vs value and cost vs equity. A sellers market is also a time to refinace to grab the equity for hard times, knowing you can make that monthly payment.
- Abnormal home price gains or return to normal price appreciation continues: After two years of abnormally high levels of home price appreciation in 2020 and 2021, it's continued price increases are moderately on the rise throughout 2022 as the demand for housing is stabilizing. However in 2022 the economy will help to lower purchasing power as investors and sellers will not profit from a high return if not sold by March 2022.
- Increase of distressed sales: Foreclosures-short sales decreased throughout the year, due to the hold on eviction and mortgage moratoriums. And while total home sales increased the market is higher in the purchasing of the distressed homes more than expected in 2020/2021; of non foreclosed homes. However, once the foreclosure ban is lifted, what will happen with all of these new foreclosed properties.
- Investors still are active in purchases: Related to the increase in distressed sales opportunities, higher home prices, portfolios of single-family homes for rent potentially reached their peak in June and are now coming down. Large-scale investors purchased higher in the single-family market sector and continues to increase as a few purchasers are getting pre-approved for mortgages. Investors still outweigh the number of first time home buyers as the economy and jobs market slowly recover. Investors have purchased the majority of low priced housing and will resell in 2022 which has caused the housing market to moderately rise, as fewer 1st time purchasers are approved due to lower family income levels as many families loose their income, have filed for unemployment or are returning to work in another industry.
- Rental units are still way above market value due to the high rate of foreclosures which brings on higher taxes. In each block taxes are causing the banks to pay the taxes if the owner is not able to do so to avoid tax lien sales. While school districts are over burdened with some out of resident parents and some other parents that have lived in the district but have lost their home to foreclosure, they are stressed and pressed for their children to continue to get a quality education, therefore, school taxes are increased as well.The rental market in Long Island is the highest in New York State.
- If you have not already purchased and you can't find anything under $350,000.00 it is better to wait the season out. It just might be that if the property is not priced right it can be on the market for a bit longer this winter, more time than anticipated. The peak of the sales are coming down and prices are being reduced on the majority of the properties listed for owners to get out of the North East before the snow comes again. So if your property is not listed already it may not be in contact for another couple of months awaiting to see any tax benefits the president will offer before years end.
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