In the last two years, finding sustainable and affordable living has been an arduous process.
While interest rates and inflation are up in 2022, buyers are losing purchasing power.
As a matter of fact, the demand for homes has hit the lowest level since 2000, according to the Mortgage Bankers Association.
A couple of years ago, buyers were concerned with beating out the competition since low-interest rates meant high demand for houses. Now, buyers are worried that they will find a better deal in the future.
Either way, buyers and sellers are stressed and hoping the housing market can make some vast improvements.
What is the current state of the real estate industry?
In the past two years, there has been an increase in inventory, meaning buyers have more choices when choosing a home.
The increase gives buyers a greater chance to land a home they're interested in while creating less competition.
If you plan to keep your home for at least three years, you'll always make a profit, Texas real estate agent Matt Templeton told LX News.
The rental market has also been challenging with rents rising 20% year over year, according to Templeton, and a housing shortage across the country. “If we thought the buying market was going crazy, the rental market has gone lunatic and many people are experiencing that,” he said.
What's a good strategy for buying a home in this day and age?
Knowing what kind of micro market you are searching for a home in is an important aspect of the process.
In high-demand areas, numerous offers may go in, leading to houses quickly selling for way over the asking price. In a higher-supply area, houses can be sold for much less than the full price.
According to Templeton, it's important to look for homes that have been on the market for at least 15 days.
"The more time they've been on the market, the more likely … other buyers are ignoring them,” Templeton said.
Another recommendation Templeton offers is to buy a home that’s less cosmetically appealing but doesn’t need a lot of major work.
“Oftentimes those homes are selling for below market and they're an opportunity for you to walk into some equity,” Templeton said.
What does the future hold in real estate?
Many of the issues buyers and sellers are facing do not come from a shortage of land but the inability to build fast enough, Templeton said.
"We have worker shortages, we have labor supply and material shortages... so I think finding new ways to build and new types of housing... is going to solve that issue.”
Accessory Dwelling Units (ADU) are one of the solutions Templeton recommends. ADU is essentially building a house behind your home that can provide units to rent out.
"You’ll have mixed income where maybe someone that's renting at a lower price lives in the back and someone that’s renting at a higher price lives in the front and you get more of a mixed community," Templeton said.
Another solution is 3D printing, which decreases construction time due to the machine's efficiency. The large machine extrudes concrete into layers that form walls and the foundation of the home.
Lastly, Templeton cites the importance of roommates when trying to save money. Having someone share your home reduces the expenses tremendously.