Our real estate market is off to a fast start despite snowy weather. So far this year, we’ve already had 56 contracts signed, 72 homes sold, and 52 new active listings. Obviously, the snowy weather has not deterred buyers. Here are some of my top predictions and things to watch for the 2022 real estate market.
Over the last two years, we’ve seen home prices rise by 20%. In 2022, I predict that prices will continue to increase but at a much slower rate and more in line with historical averages of 4% to 6%. What has happened over the past two years, where we have seen about a 20% increase in prices, is not sustainable. I could spend a lot of time explaining why that happened, but that’s for another video. For 2022, expect that we should see a more “normal” rate of appreciation. And no, I do not expect prices to come down.
Inventory levels have been extremely low the last few years. In 2022, I predict that Inventory will increase a little bit, but not so much that I expect a drop in prices. New construction has increased but is facing global supply chain challenges in the wake of COVID. Unfortunately, the pace of new construction hasn’t kept up with demand thus far. My hope is that we will see more investors selling rental properties and more empty nesters selling their homes and downsizing.
Finally, I predict that interest rates will rise in 2022. They have already started to. The question is how much. It is no secret that inflation is here and affecting all areas of the economy. The Federal Reserve has already accelerated the tapering of its bond-buying program, and experts are predicting three or four rate hikes this year alone. If you’re planning to buy this year, don’t wait. As interest rates rise, so does your monthly payment.
If you have any questions for me about my predictions, current market conditions, or real estate in general, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.