Housing Predictions - 2022

What does the housing market have in store for 2022? Check out the bigger pockets podcast for their predictions and see below formy predictions as to what will happen this year.

1. High Interest Rates and Price Cuts: Rates may not hike up as high as some think they will. Interest rates follow the 10 year treasury notes. The stock market is still surging (although we have seen a dip these past weeks) which keeps people from investing in bonds which ultimately keeps mortgage lenders' interest rates low. The Fed will raise interest rates at a steady pace to slow down inflation, but it will not reach numbers like 4 or 5% in the near future. I think low to mid 3s are reasonable to assume for this year

2. A 10 year high for new listings: Most likely this will be true. As rates continue to stay at historic lows and inventory remains low it is natural to think the prices will continue to go up. According to David and Dave we are 8 to 10 years from building our way out of this housing shortage, meaning it will continue to be a seller's market until something catastrophic happens.

3. Rents will increase by 7%: I do not personally handle long term leases, but do have an Airbnb and would say that this should hold true for most of the country. As home prices go up naturally rents will go up, but interestingly inflation for 2021 jumped up 7%. This would mean, if you rent out a home, you would just be breaking even for the year if the trend stays consistent.

4. Homebuyers Will Relocate to Small, Affordable Cities: This may be true for a small section of the general population, but most will continue to strive for this "quality of life" style of living instead of saving a few hundred dollars on their loans/rents, as I did when I decided to move to beautiful Summit County, Colorado. As more information comes out about mental health I doubt most people will make the move to smaller, cheaper cities rather than sacrifice their standard of living.

5. Condo Demand will take off: Well as for this, there is no question, especially in luxury resort areas such as the one we have here in Summit County. When the Covid-19 pandemic hit and corporate offices started working their employees remotely, many city dwellers left the convenience of city living for the picturesque, hallmark card style living of being in the mountains, minutes from the slopes and adventure. Couple this with the fact the a Single Family Home is out of reach for a lot of new homeowners so a smaller condo will be the only thing they can afford. Couple all of that with the fact the condos offer the convenience of having an HOA with property management that will take care of things like heat, water, trash removal, snow removal, repairs and so on which frees up the individual to do more things that they like instead of projects on the home.