To say the last three years have been interesting for the real estate market, including home builders, is an understatement. The pandemic changed how people go to work and how they spend time at home. Remote work prompted some to buy larger homes with more outdoor space, and some people remodeled existing homes to include a home office and outdoor additions such as three-season spaces. These renovation trends continue, and homebuyers are facing fierce competition due to the very low inventory of homes for sale. Currently, buyers seem to be interested in homes that are spacious and environmentally friendly.
Elizabeth Watson is a real estate broker with The Real Estate Group and said there is a shortage of homes for sale in the Springfield area due in part to high interest rates. Watson said that many homeowners have favorable interest rates on their current mortgages and are not motivated to sell, which doesn't help the tight inventory situation. It's a tough time to be a buyer, and a great time to be a seller.
However, there is good news on the horizon for anyone looking to make a move. Economists are forecasting lower interest rates this year, which will motivate some homeowners to sell and provide some inventory, but competition will be stiff. Watson and others are hoping 2024 will bring lower rates, higher inventory and much-needed relief for frustrated buyers.
What are buyers and homeowners looking for this year as they seek to either move or improve upon their current homes? And, how can you best prepare yourself for the future?
Watson says buyers are looking for en suite bathrooms, large kitchens that open to informal dining, family spaces and design updates such as hardwood or vinyl plank flooring to replace carpet. Office spaces continue to have a place on wish lists since many people who began remote work during the pandemic are still working a hybrid schedule.
Aaron Acree, owner of Michael von Behren Builder, agrees that making the most of extra space continues to be important for homeowners who are remodeling. This often looks like putting in an addition, finishing a basement or remodeling to incorporate an office or a man cave. The addition of covered patios and decks are trending as people want to take advantage of their outdoor space.
As for building and remodeling, Acree said that higher interest rates, the rising cost of building materials and labor have affected the home-building market. However, demand for remodeling projects remains strong.
Acree says that energy efficiency is also an important consideration for many homeowners. Smaller touches such as window and door replacements not only help keep your home up to date, but increases energy efficiency. Acree says that whether you plan to stay in your home or sell in the near future, new windows and doors are wise investments that always pay off in the long run. Other popular features are solar panels and car chargers in garages for electric vehicles.
Whether buying or renovating, consulting with a professional real estate broker or contractor before you make any big decisions is highly recommended. Watson suggests that sellers spend the time and money to do necessary repairs before they list their home. A broker can guide you to the cosmetic updates that will help sell your home quickly and at the right price. For buyers, Watson suggests that if you buy now while interest rates are on the higher side, you can plan to refinance as rates go lower in the future.
