With January 2022 tucked securely up under our belts, the new year is in full swing, and everyone is wondering what we can expect across our Front Range from the 2022 housing markets moving forward. Is this the best time to buy? The best time to sell?
Year over year stats shows only slight changes because one area, purchase options, continues to stagnate. Lack of inventory skews sales numbers as well as price information. Would sales be higher if more homes were available? Would prices change accordingly? A Realtor friend in Toledo, Ohio, expressed it well: “In a market that usually has 2-3000 homes available for sale, it’s impossible to make predictions based on the only 800 or so currently on the market.”
However, that’s just one corner of the whole picture. According to a survey of about 20 of the top economic and housing experts, they say we can expect the housing market to normalize this year. Yay! That will be welcomed by everyone involved in real estate. “Overall, survey participants believe we'll see the housing market and broader economy normalize this year,” Lawrence Yun, NAR's chief economist, said of the survey's results. “Though forecasted to rise 4 percent, inflation will decelerate after hefty gains in 2021, while home price increases are also expected to ease with an annual appreciation of less than 6 percent.”
While home sales are expected to dip slightly from 2021, the uptick in new homes should have a positive impact. Consider the Colorado front range housing market this past January. 4179 homes were available for buyers to choose from. Of those, 3500 sold and closed during January. The average sales price of $641,214 was up slightly from January 2021, which was $555,723. Average Day on Market of 30 is still a fast turnaround time.
And while mortgage rates are expected to move higher, those increases won’t likely be enough to push rates higher than their pre-pandemic level. Although the previous two years have seen some nail-biting and record-breaking moments, we’ve also seen plenty of buyer fatigue, real estate hesitancy, and some confusion.
The confusion is due to the past 12 months of speculation that we might be in another housing bubble. It’s also important to remember that the 2021 market was anything but ordinary and that escalating home values directly resulted from record-low inventory.
However, experts project that the inventory situation should improve in the coming year, slowing price appreciation.
The next big question becomes, will home prices depreciate in 2022? Housing industry experts don’t think so. Instead, they are projecting a more modest appreciation of 5.1% in the next 12 months compared to the nearly 20% rise seen on average in 2021.
Inventory has been, without a doubt, the most significant player in the anything but ordinary real estate market we’ve experienced in the last two years. Your local RE/MAX Alliance Associate has the low-down on mortgage rates, inventory details, and a few surprise moves to assist clients in overcoming fatigue. A conversation may reveal good motivation for both buyer and seller in the 2022 marketplace. With experts projecting a rise in inventory and mortgage rates remaining relatively low, both sides of the real estate transaction stand to benefit from making a move this year.