It's time to start looking forward to what the market may be like next year
 |  | | Dear Friends and Clients,
As we draw closer to the end of 2021, it's time to start looking forward to what the market may be like next year. While the market has been slowing these past few months, experts predict that we could see another year of massive home price appreciation. Home prices have already risen 20% from 2020, but the underlying cause of this increase, the housing shortage, is far from over.
The boom in the housing market this last year was caused by low interest rates, low housing inventory, and increased demand from both millennials and investors wanting to hedge against inflation. Jan Hatzius, the head economist at Goldman Sachs, writes, "The supply-demand picture that has been the basis for our call for a multi-year boom in home prices remains intact."
This has caused the team to predict that 2022 will see similar home price appreciation. "Our model now projects that home prices will grow a further 16% by the end of 2022," Hatzius continued.
The supply of homes has increased since last spring, but it is still well below pre-pandemic levels. Numerous issues are preventing new homes from coming onto the market and easing the low supply. Hatzius' team points to the supply chain disruptions, lumber shortages, lack of available plots, and labor shortages facing the construction industry.
The best solution at the moment to this housing shortage would be to ease zoning restrictions. While some states are considering or even passing legislation to do just that. With all of this in mind, it seems like there is no end in sight for the housing shortage.
But what does this mean as a seller? It may be a good time to capitalize on the market and cash out the equity in your home, but there are other factors you should consider as well. There are costs associated with selling your home, and the same market that makes it a good time to sell may be frustrating when you go to buy a new home.
Cynthia Meyer, financial planner and founder of Real Life Planning, recommends you tally the costs of your new home purchase, the costs of selling your existing home, and the potential profit from that sale. Don't forget to include items like the down payment, moving fees, closing costs, furnishing for the new home, and taxes. If the costs outweigh the profit, it may not be the best time for you to sell.
However, since experts expect high home price appreciation for next year, you may be able to recoup any costs quickly. Even without that, home prices tend to appreciate every year. This means that if you plan to stay in the new home for a while, the benefits may outweigh the costs.
To help you out with this calculation, you can instantly calculate your home's value in today's market based on recent Phoenix sales:
Enter your address here to find out what your home is currently worth.
At the end of the day, it's a good idea to talk with a Realtor if you're considering selling. Give us a call at 602-413-8195 or reply to this email. We can help you run the numbers and work through your specific situation. Of course, if you just want to ask some questions, we'd be more than happy to answer them.
We look forward to hearing from you,
Monique Walker
RE/MAX Excalibur
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Call me at (602) 413-8195 for a FREE home buying or selling consultation to answer any of your real estate questions. | | |
| | |  | |  | Monique Walker RE/MAX Excalibur 8510 E. Shea #100 Scottsdale, AZ 85260 | |  | | |  | |
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