Wed. May 25th, 2022
housing-market-forecast:-will-home-prices-“cool-down”-in-2022?

Aerial View of Chicago Cityscape in Autumn

With the booming housing market of 2021 and mortgage rates reaching rare lows, you’re likely wondering how you’ll fare buying or selling in the new year. Plenty of experts chimed in with each of their own housing market forecasts, giving us a heads up on what to expect in real estate in 2022.

City Surges

Jonathan Spears, an agent and founder of Spears Group in Santa Rosa Beach, FL expects an influx of buyers returning to metropolitan areas across the country. He states that it may seem like the market will have slowed as market value increases are curbed, but that’s because there’s not enough inventory.

“Despite some market prognosticators forecasting increases in market values upwards of 15% —primarily because the market experienced an increase of over 30% in the previous year — it may seem as though real estate markets have slowed,” Spears said. “Because of low inventory, we won’t see as high of rates of absorption simply because the inventory is not there.”

Home Value Appreciation Slowing Down

Further emphasizing Spears’s point, Andrina Valdes, COO of Cornerstone Home Lending, Inc., also expects a perceived slowdown in market value appreciation over the year. “While home values are not expected to depreciate,” she stated, “the rate at which home values are appreciating is expected to slow down.”

Valdes bases her prediction on statistics from market authorities, including:

Fannie Mae, predicting a 7.4% home appreciation through 2022

National Association of Realtors, predicting a 2.8% appreciation for existing homes, 4.4% for new ones

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Rise of Mortgage Rates, But Still a Good Time to Buy

Valdes believes that although mortgage rates are rising, they’re still relatively low and that the real estate market will remain steady with buyers throughout the year.

“A ‘priced out’ buyer should be able to find many more options,” she said. “Experts also reinforce that 2022’s housing market is not at all likely to crash — the conditions we’re seeing are nothing like those that led up to the crisis of 2008.”

Danielle Hale, the chief economist at Reatlor.com, also believes the market will likely benefit buyers in the new year.

“Home asking prices have decelerated in the second half of 2021, with median listing price growth slipping from a peak [of] 17.2% in April to just 8.6% in October,” Hale said. “Sales prices have slowed somewhat, but not yet as rapidly.”

She expects the “slowdown in prices to continue.”

For new homebuyers, Jason Gelios, a Southeast Michigan real estate agent, anticipates a stable housing market, but they should expect to “pay close to the asking price.”

“Many first-time homebuyers who weren’t able to compete with stronger homebuyers during the hyperactive sellers’ market will have a chance to bid on homes in 2022,” he said. “However, buyers should expect to pay close to the asking price, as the housing inventory will more than likely be less than where it should be.”

Low Inventory

Bill Samuel of Blue Ladder Development, a Chicago-based home buying company, expects low home inventory to remain a challenge for homebuyers this year.

“Expect a very competitive market through 2022, with multiple offers on most of the properties you are interested in,” said Samuel, who is also a licensed real estate broker. Available inventory is still low, but it is slightly higher than at the start of 2021. While the market may not be as insane as the last several months, it is still much more competitive than before COVID started.”

He also stated that, for better or worse, “foreclosures and evictions will resume their normal course starting at the end of 2021…so we will likely see an increase in the supply of homes for sale.”

But Samuel has a positive outlook on the overall real estate market in the new year:

“In my opinion, the market will continue to remain strong throughout 2022, with continued low supply. However, I don’t expect demand for housing and the overall market to be quite as hectic as 2021.”

The post Housing Market Forecast: Will Home Prices “Cool Down” in 2022? appeared first on Real Estate Express.

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