Education and news for smart DIY landlords!
The year is almost ending. It’s also the fourth quarter of the year. This means that real estate investors should start looking at the 2022 predictions for the national real estate market to decide on whether to spend money on the incoming Q1 or not.
Discussing real estate market predictions for the next year in Q4 is also vital for investors, especially those with properties ready to be sold. Because one might list a house on New Year for sale only to find that profits in Q1 are low. It could even lead to loss.
With everything said, here are 5 predictions for national and local real estate markets in the year 2022 according to housing experts.
Home prices are reaching the normalization stage. It means that the increase in property prices is slowing down. Daryl Fairweather, chief economist at Redfin, says, "If annual price appreciation falls to 3%, it would only be the second time it will have fallen so low since the end of the housing crash in March 2012. This low price growth will likely discourage speculators from entering the market and allow more first-time buyers to have a chance at winning a home."
When house prices rise, mortgage rates fall. This is to prevent lenders from losing new and return customers. But when the increase of house prices slow down or property prices decrease, mortgage rates rise. Lenders would want to avoid causing a housing crash as they did back in 2008.
If you’re waiting for mortgage rates to drop below 3%, you could be waiting in vain. The mortgage rates today might be the lowest as they could get for a few years. Q1 2022 might be the best time to buy a home, especially if you don’t have the money to purchase a property in cash.
If real estate experts predict that home price tends won’t reverse, you can expect that rising mortgage rates will have a certain threshold. That threshold also won’t be too high. This could be good news because you can still avail of a loan during springtime with an interest rate that’s affordable to pay.
Since Q1 and Q2 2022 would be the time when housing prices are at a peak for the past 2 years, it’s expected that many homeowners will be selling their homes before they lose opportunities for profit.
Expect to see an increased housing inventory of suburban homes but with less supply on condominiums and city properties. This is because people are moving in back to the city due to massive vaccination efforts.
Aside from the people moving into cities for job opportunities, there are also those who have found satisfaction and happiness from working at home. Because of that, a majority of homebuyers will be purchasing homes in eastern and midwestern cities.
Redfin predicts in 2022 that “Cost-conscious homebuyers will seek out affordable northern cities like Columbus, OH, Harrisburg, PA, and Indianapolis, which all happen to be capital cities with highly educated residents where the median home price is still less than $250,000.”
Remember that real estate market predictions are just predictions. They have a 50-50 chance of happening. True market conditions are revealed during the end of winter and the first weeks of spring.
Learn to predict market trends on your own by reading these blog posts!