Covid did not do homeowners any favours. At least during the lockdown. At this time, housing values dropped immensely, so low that these prices had not been seen for 9 years.
The lockdown was also responsible for some of the lowest home sales in recent decades. However, since the lockdown did not last forever, neither did these historic lows.
The market is changing once again as people are looking to exchange their homes and move to different areas of the city or country. The values of the current homes on the market are partly due to a lack of supply.
There are not a lot of homes on the market but that may change as time passes and the country heals from the Covid pandemic.
One reason for this rise in housing value would be the lack of supply. Right now there are fewer houses on the market. Even though the Stamp Tax holiday expired, the value of different homes has continued to rise.
This was a surprise to many real estate analysts as they expected the expiration of the Tax Act holiday would take the steam out of the rising values and level out the market.
That did not take place. A second reason why prices have remained high and going higher is that the demand outdistances the supply. There are more buyers than sellers right now and people are making bids without touring the properties they are bidding on.
There are plans in the works to build more houses and that construction should cool the market off somewhat. However, those plans have not been implemented at this time and there is no start date published yet.
Even if the demand slows down, the value of the homes is not going down with that turn of events. They are remaining high and that can be more costly to buyers in the long run.
This downturn is to be expected once unemployment rises. But real estate markets are hard to predict and anything can happen as evidenced by the uptick in values when the Stamp Tax holiday ended.
The biggest reason for this trend is the lack of available affordable housing. With more buyers and sellers right now, the prices are influenced by the old supply and demand principle.
The more demand there is the higher the prices go and this is seen right now in the current housing market. It is hoped that this year will cool off the market and more homes will be placed up for sale but so far, that prediction has not been met.
What the explosion in housing values has meant is that many first-time buyers are priced out of the market. They just cannot afford the current prices many homes are going for. Plus, those they can afford are being snapped up quickly by those families with the ready means to buy a home.
With roughly 20 homes on average available per estate agency, there are just not enough homes to help first-time buyers find one that they like and need. Even though some experts predict a slowing down in 2022, the trend has been for homes to continue to sell for higher than their asking price.
Changes have to be made in people’s spending habits if they are going to be able to afford a home at the current rates and values. The market is booming and continues to boom.
It is always tough to predict the real estate market. There are just too many factors involved that influence the market. The factors may indicate a change and prices will come down but those factors are not written in stone and prices can actually rise.
What is expected to happen right now is that the housing value will go down but continue to rise. This means that in 2022 housing prices are expected to rise 5% however, that rate is expected to lower to 1% next year.
However, that 1% is still an increase in housing costs. In other words, while the rate will slow, you can expect to still pay more for the same house next year than you paid in 2022.
The values are not slumping, just the rate of increase is slowing. The biggest factor that will influence the market will be the supply of homes for sale. If there are not a lot of homes on the market next year do not expect to see the rates or housing prices drop.
If more houses go on the market in the next few months and the demand is low, then you can expect to see both the rate and the value of those homes dip.
The best time to sell is right now. Currently, it is a seller’s market and homeowners who have placed their homes on the market are getting more than their asking price.
You do not want to wait until it is a buyer’s market as then you may not get full value for your home and your home may take longer to sell. Capitalize on the high housing values and low mortgage rates to market your home and have it sell quickly.
To keep up with all the changes to this trend, just contact us, Real Estate Experts. We are based in London and have over 10 years of real estate experience to help you sell or buy a home.
We keep an eye on the trends and the market so you do not have to. Call us today and use our experience to help you get the most out of your home.
All it takes is one phone call and our experts are ready to help you with your housing questions.
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