My Predictions for the 2022 Real Estate Market
If you prefer to read, here you go:
Alright, I’m doing it. I’m going to tell you exactly what is going to happen next year. I hope you’re writing this down…
Well, I wish, but here’s the next best thing. My heavily caveated predictions for the housing market in 2022, both locally and nationally.
The caveats to this video are the usual: no one knows what’s going to happen in the future, these are my best guesses based on the news I’ve read, data I’ve seen, and trends I’m seeing in the market, but I’m in no way a Nostradamus, so take it with a grain of salt.
-The house price appreciation is going to continue to go up, but it’s not going to go gangbusters like it did this year. 2021’s price growth was explosive and unsustainable and I think we’re going to fall back to a much more reasonable rate but it’s still going to go up.
-Locally, I’d expect closer to 5% to 7%
-National, I know Redfin and Realtor.com are predicting around 3%, which feels a little low to me based on nothing other than my gut, so take that with an extra big grain of salt. Zillow – who I’ll add just had to shut down a major segment of the business due to predicting poorly – is predicting nearly 14% price growth.
-Unless something happens with the pandemic, which is the wild card though early signs of the new Omicron Variant look promising in that it’s not as severe, rates are expected to rise. Again nothing drastic, but they’ve been at historic lows this last year, partly what fueled the crazy housing growth.
-I think rates are still going to be sub 4%. I wouldn’t be surprised to see them around the mid 3’s so maybe 3.6% by the end of the year. Rising rates should help deal with inflation and also start to put a damper on the crazy price growth that have left a lot of people behind.
Inflation is up a lot this year. Largely, that is caused by housing and rent prices going way up compounded by the supply chain issues we’ve been hearing about. We saw earlier in the year that lumber prices went way way up they’ve come down from their peak in May but they’re still up substantially from pre-pandemic prices. Hopefully going into next year they’ll be able to sort many of the issues they’re dealing with at the ports and start to get goods going and get inflation back down to a more manageable level, closer to 2% or so, but that really remains to be seen.
Things are still going to be hot, just not quite as hot and hopefully, we’re entering back into some more normalcy and a bit more a balanced market.
Let me know if you have any predictions for the housing market in 2022 or if you think I’m either right on the money or way off the mark. I’d love to hear your thoughts.