Those of us in the market to buy or sell a home this year are at the edge of our seats all wondering the same thing: Will housing prices continue to escalate in 2022?
Ahead of the spring market, we wanted to set the record straight–so to get the most accurate and up-to-date answer, we sat down with our very own Gary Scott, president, Allen Tate Realtors, to get his perspective.
Here’s what he had to say, beginning with some necessary perspective from 2021…
Unpacking the 2021 housing market
Before we discuss where we think housing prices are going in 2022, let’s take a moment to rewind and unpack why the 2021 housing market was so challenging as a buyer, and so opportunistic as a seller.
Prior to 2020, we were already experiencing low inventory levels, so when the pandemic hit in March of 2020, demand for housing significantly increased. The supply and demand curve shifted resulting in double digit price increases across the country and in the Carolinas.
In addition, historically low interest rates were also a factor in the buying frenzy, resulting in buying a home more appealing to more people.
These low interest rates and the newly discovered remote alternatives helped strengthen the already hot real estate market.
Fundamental economic principles tell us that an escalation of demand with limited supply eventually gives way to price increases, and in many areas we saw double digit appreciation, in both 2020 and 2021.
What will home prices do in 2022?
Now, here’s the good news for buyers in 2022: While we think we’ll continue to see homes appreciating throughout the year, we believe they will appreciate at lower levels than the past two years.
As a result, we are predicting appreciation to be closer to 8% in 2022. It is important to remember this will vary from market to market and price point to price point, as our industry has never been more hyper local.
What advice do you have for buyers in 2022?
While the market won’t do a complete inverse this year, we’re already seeing signs that the frenzy is starting to cool.
The trend of waiving inspections and appraisals will dissipate, but not disappear in 2022, signaling the entrance of a more discerning buyer.
Just to put things in perspective, the average home had about 5.1 offers in 2021, and we believe this will normalize towards the end of 2022.
The best advice we could offer buyers would be to find a Realtor you like and trust, and be ready to buy when the time comes.
Being ready to buy means figuring out how much you can afford, getting pre-approved ahead of time, and knowing the market conditions of the area where you’re looking to buy.
What about sellers? What advice would you offer them?
Just because it’s a seller’s market doesn’t mean that you shouldn’t do everything you can to get the best price for your home–it’s still critical to declutter, stage and present your home in the best light.
Remember this: The best conditioned, best priced homes will bring the greatest value in the shortest amount of time.
Be realistic with your pricing strategy. Just because the market is hot doesn’t mean your pricing should be unreasonable.
Do your homework ahead of time and find a seasoned Realtor who will help you with accurately pricing your home, fielding multiple offers and negotiating effectively.
Bottom line: Whether you’re buying or selling in 2022, your best bet is to partner with an experienced Realtor to guide you through the process, and we’re here to help you every step of the way.
Originally posted on Allentate.com