Real Estate in 2022
A Snap Shot of Real Estate for 2022
Real estate was on everyone’s mind and wallet in 2021. By all accounts, it was a record breaking, successful year. Homes flew off the shelf. Prices exploded. The big question is what is on tap for 2022? Here are the key considerations that will likely impact the market going forward.
Inventory:
A lack of inventory will continue to plague the markets & frustrate buyers
Inventory levels will help hold up prices to the seller’s advantage
Real Estate Agencies will need to rebuild inventories
Home prices:
Are forecasted to appreciate in the 5%-8% range
There is NO indication that prices will fall back
Added equity in homes will protect homeowners from a “crash” in values
Demand will be stable providing further support for current home values
High valuations will affect affordability at some levels
The Federal Reserve:
Inflation has gotten the Fed’s attention
It is projected that they will raise interest rates 3 times in the year
Mortgage rates will follow increasing to 3.5% to 4%
The debt-to-income level ratio to secure a mortgage will be a higher hurdle
Inflation:
Is something we will live with for this year and possibly beyond?
The cost of new home construction, materials & labor will climb
Inflation will touch everything “house” related…
The Market:
High-end properties will sell as normal affected only by inventory and selection
Vacation and second home markets will stay in the game
Trade-up---residential mid-market buyers are inclined to move to the sideline
Boomers are leaning toward aging in place
Millennials (26-42) are buying homes and will drive the market for years to come
First time buyers will feel the pinch of rising interest rates & rising prices
The market is still to the advantage of sellers
Buyers are “frustrated” as houses go under contract before they can act
Buyers equally frustrated by competition---Cash is King!
Over asking price & multiple offers will cool opening the door to negotiations
The pace of the feeding frenzy will slow
Lastly, Anyone's Guess:
Our “pandemic lifestyle”
Confusion with hybrid-remote work models and policies
Labor shortages---Supply chain issues--- Disruptions
Politics & Geo-political climates
Whether you are buying or selling our best recommendation is to put Camden Hills Realty to work for you.