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Buying Real Estate? Expert Andrew Shader Thinks You Should Get Ready

In 2021, potential home buyers faced significant challenges due to a lack of housing inventory and a lot of competition to purchase homes. Buyers were everywhere, and bidding wars were not uncommon as people navigated a tough seller’s market. Going into 2022, Andrew Shader believes we will experience some relief, but other factors could also impact the real estate market.

Here are a few expectations for buyers and sellers to consider.

  1. Interest Rates Will Continue to Rise

The Federal Reserve cut interest rates significantly in 2021 to assist with the impacts of the pandemic on the economy. However, we are now beginning to see unprecedented inflation, leading the Fed to consider increasing interest rates. In January, the Fed signaled that the market could anticipate higher interest rates in 2022.

Rates were as low as 3% during 2020. Current interest rates are averaging between 3.1 and 3.3%. As we move forward, Andrew Shader believes we can expect rates to be at 3.7% by the end of the year. While those rates are certainly higher than in 2020, they are still lower than in 2019. At that time, rates reached a high of 5%.

As interest rates creep up, potential buyers need to take advantage of the market lending rates before lending costs make purchasing a home unaffordable.

  1. Real Estate Inventory Will Increase

The year 2021 saw a reduction in available homes on the market. Many people chose to hold onto their properties rather than potentially sell them due to uncertainty surrounding the pandemic. As the severity of the pandemic continues to decrease and more treatments and vaccines for COVID-19 become available, people will be willing to make significant life changes. Thus, we will see more properties come available for purchase.

As inventory increases, fewer bidding wars will flare up between potential buyers who will have more choice when purchasing a home. This will lead to a smaller, slower rise in housing prices throughout the year than was experienced in 2020. However, as inventory is not expected to increase to 2019 levels, the market will still be in the seller’s favor.

Over the coming winter and spring months, we will likely see more homes come available, allowing a more balanced market between potential buyers and sellers. For additional perspective, the current supply of housing inventory is sold within an average of 2.4 months. A 6-month supply of housing inventory is considered ideal for ensuring a balance between buyers and sellers.

 

About Real Estate Expert Andrew Shader

Andrew Shader is a real estate investor, developer, and entrepreneur based out of Fort Lauderdale. Shader started as an entrepreneur in the insurance industry before discovering his real estate passion: finding scalability in any vertical. Andrew’s real estate strategy specializes in finding value-added properties and increasing their property value by upwards of 60% — without needing to rely on future appreciation.

 

 

 

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