Three Predictions on the Strength of the Real Estate Market in 2022
*Disclaimer: All real estate purchases involve risk of loss.
The real estate market in 2021 was undeniably hot. As we approach the new year, many homebuyers and sellers are wondering what to expect in 2022.
Mike Simonsen, founder of Altos Research, identified trends in the real estate market during the pandemic well before the headlines. He returns to offer a high level forecast for 2022 with three predictions:
1. Demand will continue to be strong into 2022.
Homes are moving faster than they typically do in December. Elevated demand is a bullish sign for 2022.
2. Low inventory will continue to be a major issue.
Inventory has been on a downward trajectory for years, and recent strong demand has only accelerated the trend. While 2022 will start with record low inventory levels, rising interest rates may cool the market enough to allow some inventory to build back up.
3. Home prices will remain high into 2022.
In 2021, median home prices jumped by about 10% nationally. Tight inventory and strong demand will keep prices high - a strong sellers market - but economic changes (such as inflation and rising interest rates) could have a cooling effect on the market.
