2022 Buying Season: Small Towns, Big Competition
Continuing our series of articles to help you navigate the 2022 buying season, we’re taking a look at a relatively recent trend that is driving high demand for homes in some surprising places. For more than a decade, rising home prices have been a reality for large metropolitan areas and their surrounding suburbs. More notably, though, rural areas have started to experience the same and, in many cases, outpace their big-city counterparts.
The new interest in smaller towns is likely to continue, so we’ve put together some details to help you understand why. In addition, as your search for a new home in one of these communities ramps up, we’ve included a few strategies to help your search go more smoothly and efficiently.
In so many different ways, COVID-19 upended what was considered normal. Jobs, social activities, retail access, and other amenities made larger cities and urban areas the real estate markets with the most demand. As our routines return closer to what they were pre-pandemic, this balance may return, but some significant shifts occurred along the way.
The explosion of remote-working opportunities and a renewed emphasis on more square-footage, home offices, and outdoor spaces made larger but more affordable homes an attractive option. Homeowners in high-density, high-value areas discovered how much farther their budget could go if they sold their current property and relocated to rural areas. Combined with the extremely low interest rates available, smaller towns suddenly had much more interest from buyers with big budgets. Without the inventory to support this demand, bidding wars and skyrocketing home prices became much more common in these markets.
The Good News
While the transition has certainly been a challenge for homebuyers, particularly first-time buyers and those with less borrowing power, it’s not all bad news. Homeowners can take advantage of rising values by selling or accessing their growing equity to improve their properties.
Buyers relocating from more expensive areas are still finding more value, even if those margins have been reduced considerably in the past two years. Also, the expectation that interest rates will increase in the coming months is likely to cool the astronomical price hikes that many buyers face. Finally, with COVID-19 restrictions relaxing, more homeowners may also take advantage of the circumstances and add their homes to the inventory this buying season.
If you’re interested in purchasing a home this year, your best approach is to have a plan rather than waiting to stumble on a great deal. Start by exploring your mortgage options. Rates are still low but likely to rise the longer you delay. Also, be sure to partner with an experienced Realtor who understands the market you’re house-hunting in.
Competition is likely to peak in late spring and early summer, so moving quickly to beat the rush or delaying until the off-season could provide additional relief. Regardless of the timing, once you find a home that meets your needs, it’s still best to make your strongest possible offer rather than hoping for a back-and-forth negotiation. And flexibility with contingencies, such as closing quickly or allowing the owners additional time to move, can often sometimes close the gap with a higher competing bid.
Get a jump on the 2022 buying season with a visit to a loan originator’s page on this website to start your application, or call to speak with one of our lenders today.
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