As 2021 winds down, it’s an ideal time to define some major goals for 2022. If you’ve decided to buy a home or sell a home during the New Year, you’d like to know about upcoming housing market trends. Or, maybe you’re considering the purchase of a Murphy, NC investment property. As you move forward, you’d appreciate some details on the real estate investment market.
Fortunately, the Realtor.com housing market analysts have done their homework. After examining United States economic trends and market indicators, these market experts recently presented their 2022 Housing Market Predictions. Buyers, sellers, and investors will likely have some opportunities along with some challenges.
Home Inventories, Prices, and Sales
Three separate variables are integral to every home purchase or sale. The term “home inventory” refers to the properties available for sale in a specific market. Home prices fluctuate up and down according to standard supply and demand principles.
A market’s home sales are determined by the relationship of the first two variables along with other economic indicators. View this summary of the Realtor.com United States housing market predictions for 2022.
Growth in Property Inventories
In 2021, low property inventories meant frenzied buyer competition for available homes. Houses often sold within hours, and homes in several price points quickly received multiple offers. To add another level of complexity, investors snapped up many properties, leaving even fewer houses for individual buyers.
In fall 2021, an increasing number of homeowners signaled their intention to list their home within the next 12 months. As a result, the inventory of homes is expected to increase 0.3% on average in 2022.
Realtor.com also expects an increase in new construction, which translates into additional properties for sale. However, builders must first play catch-up, finishing their not-yet-completed homes before breaking ground for new ones. Therefore, you’ll need plenty of patience if you’re building a house in 2022.
Less-drastic Rise in Home Prices
Since 2012, home prices have seen single-digit annual increases (on average). In 2020, however, the COVID-19 pandemic led to an unexpected buying frenzy. At the same time, the nationwide housing market was already short 5.2 million single-family homes.
While home builders focused on adding more properties to the market, existing home prices were driven higher because of reduced inventories. From August 2020 to August 2021, the market saw a double-digit rise in home prices.
For 2022, Realtor.com expects a 2.9% rise in median home sale prices. While builders continue aggressive production, homebuyers must adapt to higher purchase prices and mortgage rates. Even with those factors, though, prices are still projected to rise at a relatively reasonable pace.
Continued Increase in Home Sales
Strong housing demand is expected to continue in 2022. Realtor.com expects 6.6% higher home sales numbers during the New Year. This translates to a 16-year high across the country and in many metropolitan markets.
Over 45 million millennials will be buying their first house during 2022. Other demographic groups will also be searching for the perfect residential or investment property. With an estimated 3.3% national income growth by late 2022, buyers will have more discretionary income to spend on a home.
2022 Outlook for Buyers, Sellers, and Investors
Real estate markets of every size have one universal truth: Buyers, sellers, and investors each have differing perspectives and goals. Each group interprets a specific market through a different lens, and they make their decisions accordingly. View the Realtor.com 2022 predictions for these three key market subgroups.
Homebuyers Must Quickly Make their Moves
With housing inventories projected to rise in 2022, homebuyers will have more potential “dream homes” from which to choose. However, the market will be flooded with buyers – especially first-time millennial homebuyers and other entry-level purchasers. With lots of competition for available homes, buyers must make fast decisions and be prepared to go “above and beyond” to win the bidding wars.
With home prices and interest rates expected to rise, finding budget-friendly properties will take skill and patience. However, increasing remote work opportunities may expand geographic search parameters to more affordable areas.
View Two Useful Home-buying Tips
To maximize their chances, homebuyers should set their home-buying budgets before making property-viewing appointments. Buyers should also run several simulations to determine how rising mortgage rates could affect their house payments.
Buyers should also refine their lists of “must have” and “nice to have” home attributes. By being more flexible in their choices, they’ll encounter a larger pool of potential candidates.
Home Sellers Will Enjoy Several Advantages
With higher expected home values and prices, sellers should be in a favorable position in 2022. Although there will be more homes on the market, realistically priced properties in nice condition have a good chance of selling quickly. In addition, sellers who purchased their homes awhile ago will likely receive a respectable amount of cash at closing.
Some sellers are chafing at the bit to list their homes for sale. However, they haven’t done so because they’re afraid they can’t find another home to purchase. Sellers who liquidate their current home, and who come up empty on another one, have few options other than renting until their luck changes.
Sellers ready to unload second homes, or who want to sell their vacation getaways, probably don’t need to buy another property right away. Therefore, they’re likely in the best position in this current market. However, sellers in vacation home markets may not see the same buying frenzy that occurred in 2021.
Investors Will Likely See Favorable Returns
Investors who hold rental properties will continue to receive good returns on those homes, says Realtor.com. Existing owners are well positioned to benefit from rising home prices. Rising rental costs may entice rental investors to keep buying homes, as the extra income may outweigh higher mortgage rates.
For perspective, note that in early 2021 many investors purchased homes at a higher rate than they sold them later in the year. If these investors choose to rent the properties, they should receive good yields because of continued demand and increasing rental prices.
Predictions May be Subject to Change
Note that the Realtor.com housing market predictions may (or may not) actually come to pass. The projections could be affected by economic conditions and other variables throughout the year.
To learn about predicted trends in your regional market, speak with your local realtor early in the New Year. The Poltrock Team utilizes sophisticated analytical data, along with its realtors’ local expertise, to provide you with second-to-none market analysis designed for your needs.
The Poltrock Team – REMAX Mountain Properties – Murphy NC
Call us Toll Free at 1-866-Murphy-NC or 1-866-687-7496
Murphy’s #1 Real Estate Team ilovemurphy.com
Hurricane Florence was rough on the Carolinas, and you can see from the map, we are over 500 miles inland. Other than rain, we received no flooding or damaging winds. Murphy was the perfect place for those forced to evacuate! In fact, many of our clients did just that. We had folks escape from Myrtle Beach, SC and many more.
