The last two years have been some of the most unpredictable the world has seen in a long time. The effects of the pandemic have impacted everything from the supply chain and hygiene to labor and the way we work. Nowhere has that been more true than the housing market, which has seen tremendous changes for REALTORs, renters, buyers and sellers. As 2021 comes to a close, the market has begun to “normalize” slightly and the crystal ball has become a little less cloudy for the upcoming year. Here are what experts are predicting for the housing market in 2022.
One thing that many experts agree on is that home prices will continue to rise, but not at the meteoric rate that we’ve seen in the last year. While it is expected to still be a seller’s market, economists believe that sale prices will be increasing at a much slower rate in the next 12 months. Realtor.com suggests an increase at a rate around 2.9%, which is considerably lower than 2021’s anticipated 12% rise.
Inventory and Availability
One of the biggest factors driving up price in the last two years has been a lack of inventory. As more people began making changes to where they live, options were sparse. One reason for this has been a slowing of new construction, which will likely continue as builders continue to face labor and material shortages. Investors have also been quickly grabbing single-family homes to turn them into rentals, meaning fewer home-buying options.While it is expected that inventory may rise slightly, it will still be very low in comparison to demand. The days houses are on the market will also remain low, meaning quick turnover of the homes that are available.
Rent and First-Time Home Buyers
The price of rent is expected to continue to climb, outpacing the rise in home prices. Some potential reasons for this include the end of mortgage forbearance forcing more people into renting, and more people relocating to new cities where they will likely rent before buying. The cost and competition in the rental market will likely lead to an increase in first-time home buyers, particularly millennials. However, becoming a first-time home buyer won’t be easy, with high prices, low inventory and bidding wars still being challenges.
Home Location and Size
The rise in remote work has led lots of homeowners to reconsider their location. Suburbs and smaller/more affordable cities will likely see a rise in population, as many people are no longer required to be close to the office in dense and expensive metropolitan areas. Condo and townhouse demand is also expected to take off. While many people were seeking larger homes and spacious lots during the peak of the pandemic, multi-family home prices have increased at a much slower rate than single-family homes, leading many to consider condos and townhouses as more affordable options.
Something many experts agree on is that 30-year fixed mortgage rates are expected to rise in the face of inflation, but not too dramatically or quickly.
Why You Need Home Staging in 2022
One thing that is not expected to change in 2022 is the need for home staging. Despite sellers being at an advantage during a period of low inventory, there is still expected to be a record high of new listings in the new year, meaning there’s still plenty of competition. Homes will continue to sell quickly and buyers will need to make decisions fast, which is a lot easier when an online listing shows a beautifully staged home that the buyer can imagine themselves in. Buyers are also going to want to see more home offices and other versatile spaces, meaning that a professional stager could be invaluable in their ability to show buyers all the possibilities.
If you are looking to sell your home in 2022, Creative Home Stagers can work with you to perfect the visual appeal of your listing.