Real Estate this Year: What to Expect

Author: Brian Zell

January 2022

As we move into 2022, I’ve been asked what the real estate market will look like. Here are my thoughts and opinions…

Are we headed for a crash?

No, not even close. We have an abundance of approved buyers and a minimal number of properties for sale. Simply put, demand is high, and supply is low. 

What about Covid and Forbearance?

The number of foreclosures caused by the pandemic and forbearance on loans will be extremely low. Most homeowners who took the forbearance option with their lender have reconciled either by modification or coming current on their loans. The small percentage of homeowners who have not should have plenty of equity in their homes to sell, pay off their lender, and still have made a profit. A large influx of foreclosures is just not in the forecast.

With rates rising, how will that affect the market?

Rates are predicted to rise in 2022. That is correct. Even if some of the predictions are true and rates hit closer to 4% by fall, we’re still in a period where rates are historically low. While borrowers may qualify for a little less house, I don’t believe it will impact the market negatively.

So we won’t see many foreclosures, and rates are likely to increase.

What does the real estate market look like in 2022?

We are expecting (hoping) we’ll see a greater number of homes for sale. This increased inventory will help ease the rate at which prices are climbing. But they will continue to rise. We are several years away from a market where there is an equal number of buyers and homes for sale. I would anticipate seeing 2022 prices around 5% above what they were in 2021. That feels like a much healthier increase than the 15%-20% increases felt in many areas.

My advice for buyers in 2022? Is to be ready.

With rates on the rise, winter and spring might be your best bet to get into a home with lower rates. My advice for sellers is to prep their homes accordingly. Your house will sell, but taking a little time and effort to spruce the home up before listing and hiring an agent who will market the home properly, will positively impact your bottom line. Listing in early spring might be to your advantage.

Brian Zell – 805.836.4321