Real Estate Trends Affecting 2022
Many current real estate market forecasts indicate 2022 will present sellers and buyers with more of what 2021 offered. This month, we look at the cause behind Vermont’s market pressure to determine if we are in a housing bubble and what sellers and buyers can expect.
As reported in Vermont’s Burlington Free Press, a United Van Line survey reported that 74% of their moves involving Vermont were inbound, topping the list for percentage of inbound moves compared to those leaving the state.
Many people are drawn to Vermont due to our low crime rate, low population density, environmentally friendly policies, and high-quality education.
As many companies move towards long-term full or partial remote working opportunities, Vermont is becoming an appealing option for workers looking to escape to a family-focused way of life while remaining close to the big city.
The influx of new residents is part of ‘The Great Reshuffling’, the pandemic-driven relocation of many families who are shifting their values in the wake of the COVID 19 health crisis, is one of the major factors contributing to hot seller’s market. When we dive a little deeper into the market pressure, we see the increase in demand for Vermont property as well as the decrease in supply is not likely to wane anytime soon.
What other demand factors are in effect besides The Great Reshuffling? Despite recent increases, historically low-interest rates in 2021 are continuing into 2022, giving buyers access to cheap capital for new homes. The currently low rates make it a good time to buy and sell a home in Vermont.
Millennials are becoming homebuyers: The low-interest rates, an employee-centric economy, and student-loan forbearances are creating stability for younger millennials as well as older millennials, who are now recovering from the Great Recession of their earlier 20s. Millennials, aged 24-40 years old, are all jumping into the market further complicating supply issues.
Why the supply issues?
We look to three primary causes:
A pre-pandemic national housing supply shortage cited the United States needed to add 2.5% more housing to meet demand. Although efforts are being made to address this need, a construction and labor shortage is pushing out Vermont builders’ timelines. The overlap of 2020 projects that were put on hold due to quarantine restrictions, the labor shortage, and the supply-chain issues have all created a perfect storm to delay new builds.
Finally, many older homeowners are choosing to ‘Age in Place’, staying in their homes instead of downsizing or moving to ‘retirement states’, such as Florida, Arizona, or the Carolinas, which, for many years, was a predictable housing supply for the Vermont market.
These trends make navigating the real estate market a bit more difficult, so now more than ever, it’s helpful to have an experienced professional to guide you.
The Malley Group is ready to answer any of your questions as you consider whether making a move is right for you. Contact us today to discuss how this market impacts your situation specifically.