IN THE ‘CYCLICAL WORLD OF REAL ESTATE’ PREDICTIONS ARE STILL LOOKING UP FOR 2022, HERE’S WHAT SOME EXPERTS ARE SAYING…

AFTER A YEAR THAT SAW ONE OF THE WILDEST HOUSING MARKETS IN HISTORY, 2022 IS SHAPING UP TO BE NEARLY AS COMPETITIVE, BUT WITH PERHAPS SLIGHTLY MORE INVENTORY AND SLIGHTLY HIGHER MORTGAGE RATES.

 

By: Anita Lamberti, P .A. CIPS, TRC Realtor
Coldwell Banker Realty
anita.lamberti@floridamoves.com

 

The markets that’ll see the biggest price gains and the highest number of sales, though, could look a little different, according to an analysis by Realtor.com released in early December, 2021. Expect slower housing price appreciation, easing inflation, and rising interest rates in 2022, according to a survey of more than 20 top U.S. economic and housing experts by the National Association of Realtors® (NAR). Lawrence Yun, NAR’s chief economist and senior vice president of research, unveiled the consensus forecast during NAR’s third annual year-end Real Estate Forecast Summit.

 

“Overall, survey participants believe we’ll see the housing market and broader economy normalize next year,” Yun said. “Though forecasted to rise 4%, 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%. Slowing price growth will partly be the consequence of interest rate hikes by the Federal Reserve.” Yun forecasts that U.S. GDP (gross domestic product) will grow at the typical historical pace of 2.5%, barring any major, widespread transmission of the omicron COVID-19 variant. He expects the 30-year fixed mortgage rate to increase to 3.5% as the Fed raises interest rates to control inflation, but noted this is lower than the prepandemic rate of 4%. Looking back at the housing market this year, Yun says it performed better than it has in 15 years. NAR also identified “Top 10 Housing Market ‘Hidden Gems’” – areas expected to see outsized price growth in 2022. Two of those “hidden gems” are in Florida: Palm Bay, Melbourne, Titusville, and Pensacola-Ferry Pass-Brent. “The housing sector performed spectacularly in 2021 in many markets, with huge gains achieved in places like Austin, Boise, and Naples,” Yun said. “Several markets did reasonably well in 2021, but not as strong as the underlying fundamentals suggested. Therefore, in 2022, these ‘hidden gem’ markets have more room for growth.”

 

Florida is expected to continue to see double-digit growth in 2022. The country’s housing market is expected to cool in 2022, mortgage rates will tick up and inventory will grow, according to a panel of experts at the NAR Editors Conference in December 2021. It will be an interesting year to watch and make our moves intelligently.