The last two years have been some of the most dramatic in real estate history. Home prices soared during the pandemic, with low mortgage rates and high demand leading to a strong sellers’ market. Homes were flying off the market – many were listed just a few hours before multiple offers came rolling in, sometimes over asking price.
However, the last few months have started another paradigm shift. The Federal Reserve is raising interest rates to combat inflation. The rate of a 30-year mortgage now averages around 5.51%, whereas it was closer to 2.88% a year ago.
Some real estate forecasters believe the market is headed toward a downswing nationally, as rising mortgage rates, rapid inflation, and high housing prices scare off buyers.
But what about the Northeast Florida market? The good news is that things are looking a bit sunnier here. Demand still remains high in Florida, but there is also more new construction to help meet that demand. With that said, we are likely looking at a cooler housing market, in which buyers are more cautious and the sellers’ advantage isn’t quite as strong.
Whether you are looking to buy or sell your home, 2022 can still be a great year to do so. As a Northeast Florida Realtor for over 15 years, here is my advice for both buyers and sellers.
Tips for buyers
- Figure out finances before jumping into a sell. Mortgage rates have been historically low for a while, so the recent rate hikes add another financial wrinkle for buyers – especially first-time homebuyers. When you are determining what home you can afford, try sticking to the rule of thumb that your house payment should not exceed 28% of your gross monthly income. The house payment includes your mortgage, insurance, and maintenance.
- Consider new construction. Jacksonville is currently considered as the top city in Florida for construction. New neighborhoods and homes are being added to the market in response to high demand. Keep your eye on new builds. If you have some wiggle room on when you can buy property, waiting to enter a new, move-in-ready home could be an excellent option.
- Work with a real estate expert. In our rapidly changing market, it is pivotal for buyers to work with an experienced Realtor® who understands the market and can navigate you through the homebuying process. A Realtor will help you set your priorities, find homes, check for property issues, and handle the complex paperwork that comes with closing on a home.
Tips for sellers
- Reevaluate your listing price. Although we are still in a sellers’ market, the heights of 2021 are behind us. More and more sellers are not getting the instant bite on their listings that they expected and have started reducing their prices. If you have a home on the market that isn’t selling or are considering putting one on the market, now is the time to reevaluate your expectations. Rising mortgage rates have reduced buyers’ power, and they are being more careful as a result. A real estate professional can assist you in setting an appropriate asking price based on their knowledge of market conditions.
- Stage your home to appeal to buyers. Making a few minor updates to your home can have a tremendous impact on your success in the market. Consider freshly painting your home’s exterior and interior with neutral colors, hiring a professional cleaning company, and refreshing your landscaping. Avoid making any highly personalized design choices, like a bold backsplash in the kitchen or a chandelier in the bathroom. You can read more about my tips for increasing your home’s resale value here.
If you’re looking to buy or sell a Northeast Florida property in 2022, it’s best to work with an expert Realtor® who can help you achieve your goals. Call me at 904-626-1551 to get started.
