One of the things that has been realized during the last few years is just how difficult the real estate market is to predict. Many people thought that during the height of the pandemic we would experience a housing-induced recession. Instead, we had a boom in demand that we had not seen since the mid 2000’s. We have seen double digit home appreciation and low mortgage rates in 2021. Will we see a repeat in 2022, and what are the predictions for real estate in 2022?
The Crystal Ball
What are the predictions from the real estate experts and economists for the 2022 market? Will it be hot or cold? Most are saying that the real estate market will remain strong. We will continue to have strong demand that will be tempered some what by the problem of affordability. There will be slower growth and appreciation but still positive growth. There will be more inventory on the market and with mortgage interest rates predicted to remain low, but rising somewhat. Unlike the low interest rates around 3% they are predicted to remain low but move up over 3 and closer to 4%. There are predictions that we will continue to see rising employment and growing demand in the market which could see home prices rise in the high single digits rather than the double digit increases that we have seen.
What is expected in home building? Strong demand for new construction is predicted to continue in 2022. It is predicted to continue to be a of a shortage of construction materials and problems in the supply chain. The lumber costs which sky rocked 250% in 2020 and caused problems of affordability in new home construction is predicted to see prices dropping, but volatility in the supply chain continuing.
Boon For Buyers
What does all this mean for home buyers in 2022? The real estate market is predicted to not be as difficult for buyers as it has been the last 12 to 18 months. It is not going to be a walk in the park but not as difficult. Buyers should still expect to have to compete with other buyers, but not to the extent that they have had to. Rather than sellers receiving 10 or more offers on a home, the seller may see 2 or 3 offers. This still means that buyers need to make sure that they are pre-approved with a reputable lender and in the strongest situation possible.
Still A Strong Market For Sellers
What does 2022 look like for seller’s? Predictions are that sellers will have fewer offers and homes could stay on the market a bit longer. If you are planning on selling your home in 2022 how should you prepare for the market? Make sure that your home is price right! Make sure that your home looks its best. Work on curb appeal now. Contact Lestel now to get ideas on little things that you can do to get ready.
In the End
No one knows for sure what will happen in 2022 but predictions from the professionals make it sound like it is going to be a good year!