Events outside of our control have shown how difficult it can be to predict changes in the housing market. In 2020, experts assumed a housing-induced recession would take place. However, the opposite came to fruition, and the real estate market thrived in a way that hasn’t occurred since 2006. For sellers, it came as a relief that the housing market was booming in light of nationwide inflation. But this leaves people wondering if a housing market crash is on the horizon in 2022.
Given the most recent data, the housing market doesn’t appear to be on the verge of collapsing anytime soon. Property values are sky high, and inventory is increasing, while the needs of homebuyers are ever-evolving. Get your real estate business ready for its best year yet with these hot housing market predictions for 2022.
1. Property Values Will Stay High
Although some people were sure the housing market would crash in 2022, it appears that prices will remain on the rise until further notice. Zillow’s market forecast anticipates home prices to rise 11.8% by April, and home prices are expected to grow at levels that surpass those before the 2008 recession.
Of course, while this is great for sellers, this isn’t always a great sign for buyers. The median home price has risen to $346,900, which is $50,000 more than the median home price in 2020, and mortgage interest rates are expected to rebound in a big way. In 2021, mortgage interest rates were at an all-time low. However, economic experts predict that the Federal Reserve will raise interest rates about four times this year, so keep this in mind when you’re advising buyers.
Still, experts are predicting a rebound in the housing market as people gradually recover from the drop in income that affected many when the pandemic began. Furthermore, the demand for housing surpasses the supply of homes available, so buyers are eager to purchase when they find a property that suits their needs. So despite the higher price tag, it is easy to see why the housing market will boom this year!
2. Increase in Home Building
A significant contributor to the increase in housing prices is that there are simply not enough homes to meet the current demand. Although builders are making an effort to increase their construction, the vacancy rate of homes for sale remains at an all-time low. The lack of lower-priced homes is especially prominent in the housing market.
Recently, construction firms have been stymied by restrictive zoning, a higher cost of lumber, and supply chain disruptions, but experts predict that the industry will grow slightly in 2022. Currently, 34.1% of the homes for sale are new construction, so if you’re connecting with buyers that are interested in an older, traditional home, keep in mind that their options are limited — and consider selling them on the benefits of a brand-new house, instead.
3. More People Moving to Small Cities
As more people work from home and the cost of living continues to rise, buyers are prioritizing homes that meet their changing needs. Fewer people are moving to large, expensive cities in search of jobs, instead favoring remote work from smaller, more affordable cities. As a result, people in the real estate industry should focus on small towns with strong economies.
Demographic trends point to people of varying ages and backgrounds leaving big cities for homes in quieter places. In fact, 31% of young adults in urban areas abandoned their old lifestyle in favor of being closer to their families while accommodating their desire to remain socially distant from others.
Naturally, people moving away from the city are more interested in amenities that were impossible to enjoy in a small urban plot. Impacting our housing market predictions for 2022, we now see homebuyers interested in ample yard space, home offices, and gyms. Space is even more crucial to homebuyers with children because people are spending more time indoors together.
4. Flexible Work Hours Require a Flexible Living Situation
Although affordability is one of the primary reasons we can expect an increase in relocation to the suburbs and beyond, drastic changes in the way that people work are also impacting this change. Companies in nearly every sector made the shift to a remote work model if it was viable for their business. And surveys have shown that many workers prefer to work from home, even if it is only for a few days out of the week, giving rise to hybrid work models where going fully remote is not an option.
So, what does this mean for the housing market? For starters, homebuyers in large urban centers are more willing to live a little bit further from downtown than in years past. In addition, many buyers now see the inclusion of a home office as a requirement, not a luxury.
Also, as technology infiltrates every aspect of our lives, millennial homebuyers have shown a keen interest in homes with smart features, such as Wi-Fi-connected refrigerators and thermostats that they can control from their smartphone. Consider ways to meet the changing needs of homebuyers as the way they live and work evolves.
Call Motivated Sellers
With these promising housing market predictions for 2022, it’s the perfect opportunity to take your real estate business to new heights. Call Motivated Sellers can help you get started!
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With a steady supply of warm leads from Call Motivated Sellers, your team has the flexibility to revive cold leads gradually while still closing on other hot prospects. It’s the perfect pipeline to keep your business in steady growth. And getting started is easy — to begin boosting your supply of sales leads, just contact our team today!
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