This year has truly been a wild ride in real estate. Earlier in the year, the market was red-hot, and homes were being snatched up left and right for record prices. Now that the year is almost over, the market has slowed some, giving us time to take stock. How much thought have you put into next year’s market? According to some experts, the outlook for 2022 is mixed.
Over the past year, home prices soared upward by as much as 20%, though that did little to increase inventory since buyer demand was so high. In 2022, home prices won’t increase at quite the same rate, which is good news for buyers who have been frustrated by the ever-growing price tags on homes. However, prices are still expected to increase, and it’s unclear whether the housing shortage will shore up by then despite efforts by home builders to increase inventory.
According to a team of Goldman Sachs economists led by Jan Hatzius, “Of all the shortages afflicting the US economy, the housing shortage might last the longest. […] While the supply of homes for sale has increased modestly since the spring, it remains well below pre-pandemic levels and the outlook offers no quick fixes for the shortage.”
But these conditions have done nothing to slow buyer demand. Redfin found that, during the four weeks that ended Oct. 17, one-third of homes in over 400 metro areas went under contract within one week of being listed. Lawrence Yun, chief economist at the National Association of Realtors said this of home sales: “Although there should be a slowdown going into 2022, they will likely remain above pre-pandemic levels.”
The disparity between buyer demand and available supply suggests that home prices may well surge throughout the 2020s. And even though builders are still constructing new inventory, they’re limited by worker shortages and cost increases. The annual rate at which they’re building homes is well below the threshold needed to catch up with the deficit. To close the gap, builders would need to double their output for the next five or six years, according to economists at Realtor.com.
So what does this mean for you?
If you’re a seller, now is an excellent time to list. The winter months typically mean reduced competition from other buyers, and the buyers that are out looking for homes in the market are highly motivated. Because both home prices and mortgage interest rates are on the rise, you’re sure to fetch a great price for your property from buyers who are feeling the pressure, assuming your home is in good condition and priced correctly for the market.
Do you know what your home is worth? If not, you can instantly calculate your home’s value in today’s market based on recent Pittsburgh sales:
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If you need professional help in getting your home sold for top dollar and in record time or if you have any questions about the market, give me a call at 412-303-3600 or email me at email@example.com. My Team and I would love to go over your current situation and develop a strategy for your success.