As we prepare to say goodbye to another year, the housing market continues to prove that there will always be a demand for real estate; whether it’s to relocate to find better employment, to downsize to save money, or to purchase investment property.
All around the country, people want to know what’s in store for the market before diving in. We’ve gathered realtor’s insights on housing trends and we predict these five factors could play a big role in how the market will fare in 2022.
5 Realtor Predictions They Think Will Impact 2022 Housing Trends
1. Buyers balk at steep prices
Although housing prices have increased steadily during the past year and a half, houses have been snatched up like hotcakes. Buyers didn’t hesitate to submit offers – sometimes even above asking!
For a detailed analysis of the Seattle and Snohomish County housing market check these out:
That eagerness is starting to cool because, according to 54.4% of realtors, their clients are beginning to think twice about going through with their contracts once they realize how much they’re going to be paying.
2. Sellers will come out in droves as public health improves
As vaccination rates continue to rise, 32.9% of realtors believe that clients who have pulled their houses from the market at the start of the pandemic are likely to reenter the market.
Agents say that as the public health crisis improves, new sellers (meaning those who have been waiting to start the selling process) will enter the market to cash in while houses are in demand.
3. Goodbye cutthroat bidding wars?
This time last year, 52% of real estate agents said their clients would receive multiple (and appealing) offers on their homes. Sometimes the competition would be so competitive, bidding wars would ensue if the seller hadn’t chosen which offer to accept. That’s not the case today.
With more people listing their houses for sale, there are more properties for buyers to choose from. As a result of the increase of inventory, 54% of agents say bidding wars in their areas have cooled significantly and properties are only getting two or three offers at best.
4. Material costs holds up new construction projects
In the past, if you couldn’t find a house that fit every need and want on your list, you could always hire a contractor and have a custom home built or a new development at a reasonable cost. Unfortunately, the cost of materials have increased so much, the demand for new construction has dried up.
Contractors now have to pay more for materials and that cost is passed on to you, the buyer. For example, the cost of lumber today would add a whopping $36,000 to the base price for a single family home.
5. All hail the cash buyer!
In the past, buyers with pre-approval letters had the leg up over other buyers who didn’t get pre-approved. However, even though the loan is pretty much guaranteed, sellers are more likely to accept an offer from a cash buyer than anyone else.
To the seller, they don’t have to worry about the contract being cancelled because a potential buyer’s funding falls through. With a cash offer, they know that once the contracts have been signed, they’ll have that full amount in their hand once the ink dries.
As a cash buyer, if they didn’t want to offer the full asking price and they use a home value estimator to write their offer, there’s still a high possibility that the seller would accept that offer because cash is king. There’s no two ways about it.
2022 housing market trends aren’t set in stone
These predictions aren’t set in stone. These predictions are a great jumping off point to determine whether it’s a good time to buy or sell, but your best bet is always to consult with your local realtor.
They’ll be able to answer any questions, offer insight and advice about what would be in your best interest. Remember, when in doubt, reach out to a real estate pro!