Wednesday, January 26, 2022 / by Brian Armstrong
We are living in a unique era of real estate history in Vermont. Covid-19 has dominated the real estate market for two years, and it continues to impact the value and supply of homes across the state. If you tried to buy a home within the last two years, you know the forces you are up against. However, there are still opportunities, and many homes are still going under contract. Uncover the factors driving market challenges for buyers, and the likelihood of it letting up in 2022.
Mortgage rates were low in 2020 and have continued to fall even lower through 2021. Record low rates have driven more buyers into the market, even though it has remained strained with inventory shortages from 2020. The pandemic has created uncertainty, but the overall interest in homeownership steadily increased as other spending decreased across the economy. With that said, indicators show that interest rates may rise from these record lows in 2022, slowing the rush, and allowing a better chance at closing on a home. A rise in mortgage rates will likely lower buyer competition and improve the supply chain challenges that exist today
Work From Home
Another major shift induced by the pandemic is the cultural shift from onsite work offices to remote work across many workplaces. While at face value this may seem like a minor change; the impact on the real estate market has been huge. Workers have more flexibility about where they live, which has made Vermont an attractive state for many buyers. Imagine working for a firm in New York City from the comfort of your home in Burlington. You may continue to earn the same wage without the sky-high cost of living expenses from residing in the big city. This impact is likely to be long-lasting as many corporations have implemented long-term remote work solutions.
We all get burnt out from time to time and fighting for your dream home is no easy feat. Whether you are running around to look at potential homes or placing offers on multiple properties that you can't seem to win, the home buying process can be cumbersome. We have seen properties selling in mere hours, homes with more offers than they can review, and homes selling for way over their asking price. These barriers have discouraged some buyers and made homeownership feel impossible, but there is still hope. Over 10,000 homes sold in 2021 and there will be more opportunities, so stick in there and keep hunting!
New Construction Challenges
As we saw last year, the price of lumber and other building materials has risen drastically. This shift has continued into 2022 with volatility that has not been seen since World War II. Coupled with rising inflation outside of lumber prices, the cost of building a new home has increased substantially, limiting new home construction, and adding to the short supply challenges. The National Association of Home Builders announced a one-point drop in builder confidence, which could indicate this obstacle may stick around for the foreseeable future.
While many of these changes to the market have created hardships, your dream home purchase is still certainly possible. If you are not competing in the market or are waiting for a slowdown that may not happen for a while, you could miss out on low mortgage rates and the perfect home. If you would like to explore the existing inventory or learn more about the market as it evolves email us at email@example.com.