2022 Market Forecast
How's the market? - That’s the question that I get asked most often as a real estate professional. Whether it’s just casual conversation or a more serious inquiry, it’s definitely important to understand what’s happening in the world of real estate and how it can impact you.
Recently, we’ve been experiencing unprecedented increases in home values and the market has been hotter than an asphalt parking lot in the Cackalacky summer sun. We’re expecting it to stay strong this year, but there will be some notable differences.
Firstly, home price appreciation will slow, but continue a steady upward trend. Instead of 15% annual increases we should see 5-8% depending on which economic forecasts you read. That’s more realistic and sustainable over the long term anyway and will give better stability to the market. It’s like we’ve been going 115mph down the interstate but now we’re slowing down to 70mph. In the upstate, we may see slightly higher appreciation because of our continued economic growth and influx of new people.
Secondly, interest rate increases will significantly impact buyers purchasing ability. Rates have already started to tick upwards and that will continue throughout the year. By the end of 2022 it will likely be in the 3.75%-4.25% range. What does that mean for a home buyer? Either you can buy a lower priced home or pay a higher mortgage payment. This is a major contributing factor to the deceleration in price appreciation noted above. We generally advise making a moving decision sooner rather than later because significant interest rate increases coupled with modest increases in home prices will make it more expensive for you to buy a home.
Finally, we’re expecting an increase in home sales and more activity. Despite costing a little more, the more stabilized market will encourage those that were skittish to take action. People who wouldn’t list their home, for fear of being homeless, may be willing to do so now. Many buyers who were put on the sidelines due to the severely competitive market may start to start looking again. It’s going to be a breath of fresh air. New home construction will also continue at breakneck speed to try and fill the housing shortage.
On a more personal level, we’re diligently working on growing our business. Our team is adopting new systems and improving our client experience, we’re stepping up our marketing technology, and we’re doubling down on the success from recent years. We’ve been incredibly blessed and we’re so fortunate to have an amazing support network of friends, clients, and vendor partners. We’re always available to you and would be happy to discuss your specific situation and needs. Consultations don’t cost a dime! I would also consider it the highest compliment if you would refer someone you know to me. I promise you’ll be glad you did!
Co-Leader of The Long Team