To my clients, prospects, and friends:
Please click the link below to read a timely Realtor.com article that pertains to 2022 housing trends and predictions for the entire country. However, most of it is applicable to regional and local markets. Realtor.com is the largest real estate portal and is owned by News Corp. They were owned by the National Association of Realtors (NAR), but there is still a business connection.
The article is quite long, so here are the highlights:
+ Compared to 2021 the real estate market will slow down. However prices will continue rising (not by as much as in 2021), but mortgage rates will increase to an average 3.3% and by the end of 2022 rates could average 3.6%. However, mortgage interest rate predictions aren't always accurate.
+ Competition for buyers won’t be as intense, but inventory will still be critically low. Therefore, it will continue to be a seller’s market.
+ Nationwide property values (selling prices) will increase at a slower rate of 2.9%. However, it is very likely that prices will increase at a much higher rate in L.A. County, Southern California, and most metro areas because of the critical housing shortage and much greater demand than supply,
+ Buyers won’t be able to be as selective as they would like to be. One reason is low inventory partly because home builders are having a tough time ramping up construction. They are contending with workers and materials shortages.
+ Another reason for the housing shortage is investors are snapping up single-family homes and renting them out.
+ Move-in condition homes and homes even in fairly good condition and in fairly desirable locations will sell quickly, and many with multiple offers.
+ Houses in suburbs will be in demand and will sell fast because many people will work out of their homes because of the pandemic, and they can buy a larger home away from the city and at a lower price.
+ Don’t expect prices to peak and then decline, because inventory is still very low and it will take years for supply to catch up with demand.
+ Rental prices will continue to rise. One big reason is there aren’t enough houses to buy, so many would-be buyers will have to rent.
My comments: What should buyers who need to buy do? Be ready with your financing so you can act quickly when you see a house that you want; don’t expect to have a low offer accepted, although there will be exceptions (some cosmetic and major fixers, lots of deferred maintenance, less desirable locations, etc.); and consider accepting a “less than perfect” home. Finally for now: If you find a highly desirable home you can be sure others will also want that home. If that’s the case, the faster you move the less chance for multiple offers.
The article: https://www.realtor.com/news/trends/what-to-expect-in-2022-housing-market/?identityID=60e1ce9ae19e310147504040&MID=2021_1217_Weekly_NL&RID=25232484342&cid=eml_promo_Marketing_NonPRSL_WeeklyNL_cons.13890462_2021_1217_Weekly_NL-blog6futureofrealestatein2022-blogs_trends
To your success,
Flavia