Here’s a look at what to expect from the 2022 housing market.
What is going to happen in the 2022 real estate market? Today I’ll share some insight and statistics from the National Association of Realtors (NAR), as well as discuss how our local market will differ from the national predictions.
First of all, the NAR predicts unit sales will increase by 6.6% over last year. To me, that seems a little bit too high. I don’t see much new inventory coming on the market yet—and where would it come from? The only people who aren’t putting their homes on the market are those who are too afraid to do so in light of the pandemic. That will change with time, and we may see a bump in inventory from that. I also think that people will notice their neighbors getting astronomical prices for their homes and will be inspired to list themselves. I simply don’t see there being enough change to warrant a 6.6% increase in sales. I hope I’m wrong; we could use more inventory in the market.
The NAR also predicts that sales prices will rise by 2.9% over last year. I think this is a low number because our average is about 4%, and just last year, we were in the double digits. I don’t suspect the sales price dynamic to be below average this year. Coming from a buyer’s agent, the buyers I’ve been working with over the winter have gotten involved in numerous multiple-offer situations, and homes are still selling for over asking prices. On the listing side, I can also confirm that homes are selling quickly and for top dollar, which is striking considering that this time of year has typically been slow.
In fact, you can see in the chart at 2:51 in the video above that the average sale price tends to go up between January and July before dropping down between August and December; we typically give up about half of the gain in each down cycle. However, as you’ll see in the chart, we didn’t give up half the gain in the winter of 2021—we only gave up about a third of the gain. This illustrates that our prices are even firmer than is normal for this time of year. I believe that when spring comes along, home prices are going to shoot up again, though probably not as much as last year. Our local prices go up between 6% and 8%, which is far more than the NAR prediction.
The NAR cites increasing interest rates as a reason that prices are going to be a bit more capped, and I agree. Interest rates are supposed to increase to around 3.6%. They’re about 3%, so that will make a difference, but that’s more of an adjustment than a game-changer
In the end, the 2022 market is going to be a lot like what we saw in 2021, except maybe not as intense. If you have any questions or need any assistance, don’t hesitate to give us a call or send an email.