The tremendous real estate boom in the U.S. has started to slow. The rise in prices recently was triggered by two things. One was low interest rates and the other was the American mobility created from the “work from home” movement. The prices people can command for homes has started to flatten in some markets, however. Buyers, who were at a disadvantage for over two years, have started to get the upper hand.
Interest rates on 30-year fixed mortgages dropped below 3% early in 2021. They stayed there until the start of this year. As the Federal Reserve upped rates to head off inflation, most other interest rates, including mortgage rates, moved higher.
At the start of the COVID-19 pandemic, millions of people began to work from home, as businesses shuttered to prevent the spread of the disease. Some of these companies continue to allow people to work from home. Others have developed hybrid models so people can split their time between office and home. People who could work from home moved, in many cases, from where they had to live for work to places they found more desirable. Much of this migration was from expensive cities on the coasts which included New York, San Francisco, and San Jose. Last year, the median home price in San Jose moved above $1 million.
Low interest rates helped people who wanted second homes to buy them. Once again, this trend may be capped by rising mortgage rates. However, the purchase of a vacation home remains attractive in many places.
Evolve looked at The 12 Best Places To Buy A Beach House in 2022. Much of the analysis was based on where people could best rent these homes to make money. The data considered was the price of homes, the yield from rentals, and cost to maintain a vacation home.
The list was topped by Murrells Inlet, SC. The median listing price in the city was $387,736. Median rental revenue was $35,951. The spread geographically was wide and included cities in New Jersey, Massachusetts, Florida, Oregon, Maryland, Washington, and Alabama.
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