What to Expect in the Real Estate Market 2022

Most people already know about the effect the pandemic had on the real estate market. Record-high and record-low mortgage prices and a shortage of houses on the market. 2020 and 2021 have been a competitive rollercoaster ride for the real estate market and everyone is wondering what will happen in the upcoming year, 2022?

While no one can predict the future, we do have a few predictions as to what 2022 will hold when it comes to the housing market.

Slowing Down

Housing experts have already discussed how the market is slowing down and returning to “normal” compared to the spring of 2020 and 2021. However, even with the market gradually slowing down from the frenzy, people should still expect tight inventory and challenges for buyers, especially first time buyers.

Sellers Market

We have all been hearing the term “sellers market” since the COVID-19 pandemic began. We predict in 2022 that will not change, as the housing market will still very much be a sellers market. With the housing inventory so tight, sellers can expect multiple offers and even bidding wars. They can also list their home for a much higher price than you would normally. The market will continue to be fast paced.

Home Prices

Compared to the 12% rise in home prices in 2021, it is predicted the prices will continue to rise but at a much slower pace of approximately 2.9% according to economists from Realtor.com. Even though prices will be rising at a slower pace, the prices that shot up in 2021 are not expected to come down in 2022 because of the continued shortage of houses on the market and the high levels of demand from buyers. Simply put, the price growth will slow down, however, the prices that reached new highs will not come down.

Low Inventory

Unfortunately, it is predicted that the shortage of inventory will continue in 2022. It is anticipated that only a 0.3% rise in homes for sale will occur. Part of this is because there is still a shortage for construction materials and workers. Another reason is the influx of investors snatching up homes to turn them into rental properties. Low inventory with the amount of homebuyers today makes for a very competitive and fast paced market. That isn’t expected to change in the upcoming year.

Rent Will Continue To Rise

For renters, they saw soaring prices in 2021. Unfortunately tenants are not expected to get any relief from the high rent prices and prices are expected to rise by 7.1% in 2022.

At the beginning of the pandemic we saw record lows for rent prices, which caused many people to move into a nicer or larger apartment, or even rental home. In 2021 however, tenants were hit with steep price increases. This is because there is a shortage in not only homes to purchase, but to rent as well. With so many aspiring homebuyers having to wait months or continually losing out on offers, they have to settle for renting.

While the future can be a scary thing, Legacy Homes is here to help you navigate through the real estate market. If you’re looking for a custom home builder in Huntsville, Madison or Athens, Alabama, contact us today.