Let’s analyze what can happen to the real estate market in the second half of 2022
Is it a good time to sell a property?
The real estate bubble, like any bubble, pointed to 2 possibilities: Either explode or lose air until it deflates.
Moderate market fluctuations are always a preferable scenario to an economic downturn.
And that’s how it happened. By 2022, as many properties were being sold as during the housing boom, and prices were experiencing their highest increase since 2007, as they were during the peak of the bubble. Everything points to the fact that from September to the end of the year, along with the rest of the economy, real estate prices will slow down.
And it doesn’t seem like it, but since the outbreak of the war in Ukraine, 165,000 flats have been sold in Spain.
Some experts say that the acceleration the market was experiencing was to some extent dangerous. For example, in April the acceleration of prices was 12% compared to last year, but the monthly drop in sales was 20%.
We can explain all this phenomenon through 3 causes: inflation Interest rate hike The fear
Inflation
Inflation means is a hole in the pocket of citizens. Less money to buy the same means that, in many cases, buying a home is a long-term project.
The increase in building costs is also paralyzing new developments. Some promoters have returned signals to buyers and are waiting for the evolution of prices.
Interest rate hike
The price of flats continues to rise and at the same time the financing needed to buy is also more expensive, Until recently, the bank offered interest at historically low fixed rates, but the European Central Bank already set a date for the interest rate hike this past July with an increase of 0.25 points.
In large cities (Barcelona, Madrid, Bilbao, Valencia…) the effect of falling demand is disguised by an attractive market with little supply.
But in other cities it can be translated as an adjustment of the purchase that ends up having an impact on price drops.
The fear
As a result of these 2 certain and measurable factors, a third factor of psychological origin arises. Fear paralyzes markets.
Not everyone reacts in the same way, and this fact will translate into a change in the composition of housing demand. The number of investor buyers will increase, looking to combat the effects of inflation. And the number of private buyers, who are the ones with the most financial impediments to access financing, is slowing down.
There is institutional interest in the Spanish territory and the factors are not so serious as to stop this trend.
Is it a good time to put a home up for sale?
The situation is complex and the answer is not unique.
It will depend on the characteristics of the home. From where it is located (city and area) to its possibilities. It is necessary that you do not let it happen and inform yourself efficiently.
Depending on the property in question, selling during the current climate can have very different consequences. It can be both highly beneficial and counterproductive.
- You must be informed of the current mortgage situation Must be aware of laws and regulations (current and future)
- You need to know what type of client is appropriate for your property
- You need to take care of the whole buying and selling process and not leave any fringes.
If Real Estate advises you to put yourself in the hands of experts.
Let’s talk!
