As 2022 approaches, buyers, sellers, and real estate agents are looking towards potential changes in the market to dictate their real estate plans. But what do these changes look like? Keep reading to find out what you can expect from 2022!
Housing experts say the market is beginning to “normalize.” But what does that mean? Home prices are not expected to continuously shoot up. Instead, the prices are forecasted to increase at a steady 2.9% over the year. In contrast to the 12% rise in price for 2021, this minimal increase is a significant improvement. However, this means prices are not expected to go down any time soon. With prices and rates at a high, buyers are not expected to be as aggressive with their offers. This could mean sellers won’t see the bidding wars they might have in previous years.
High Prices, Tight Inventory
Even with the slowing of real estate prices, inventory will remain tight. With fewer workers and building materials available in the construction industry, as well as global supply chain backups, housing construction has decreased greatly. Additionally, the market is getting a flood of new buyers as millennials search for the perfect home. With low inventory and abundant buyers, the market will remain tight, executed to increase in inventory by only 0.3%. Unfortunately, rental prices have risen too; desperate buyers who are considering renting a home will find an equally competitive market.
Rising Mortgage Rates
As COVID-19 began to impact the market in 2020, low mortgage rates allowed buyers to buy homes that may have normally been out of budget. Less monthly interest meant more expensive homes. Now, an improved economy and inflation have caused mortgage rates to increase again. By the end of 2022, experts expect mortgage rates to hit an average of 3.6%. For a $380,000 home, this could mean an additional $157 on a monthly payment, or an added $56,500 over the course of a 30-year mortgage loan.
The Silver Lining
Experts predict that 2022 will continue to favor sellers. Homes are selling quickly and at a higher price, much to the seller’s benefit. The good news is that competition is expected to decrease in intensity. Many buyers experienced the chaos that was searching for a home in 2021; the highly competitive market made it extremely difficult to navigate the search for the perfect home. Hopefully, the expert’s forecast for a less cutthroat market will prove to be true. Regardless, buyers and sellers alike should look for the right agent to help make their real estate dreams a reality.
Upcoming Local Events
Start off 2022 by keeping our beaches clean! January 1st from 8:30 AM to 11 AM, join the Treasure Island Adopt-a-Beach group in the culture of no littler by helping in the first beach cleanup of 2022. This event will help protect the Treasure Island beaches and sea turtles from holes, mounds, and unnatural night lights.
To learn more about this event, visit the Beach Cleanup: A New Year / A Trash-Free Beach Facebook page here!