Market Forecast for 2022
Market Forecast for 2022
Full Video Transcript Below
[00:00:00] Good afternoon, real estate fans, Alice Lema here, broker John L. Scott in beautiful, but chilly Southern Oregon with another edition of our weekly podcast, dah dah dah. This week 2022 housing market forcasts. This is going to be really good. I've got three predictions that might influence your decision to buy or sell right now. And also. Into the new year.
[00:00:23] Okay, before we get to that one and give you an opportunity to subscribe to the channel, like it, share it with your friends. We're getting lots of great feedback from people there. They're starting to try out some of these tips and getting some really positive responses back. So, yay. Thank you for that.
[00:00:39] So with that behind us, let's get on with three predictions that might influence your home sale home, purchase decision, now in, in the near future 2022 housing market forecast. Okay. First of all, let me say, disclaimer. These are not my personal forecast. I do happen to agree with most of these, but I've got three to five different experts nationally that weighed in this week.
[00:01:05] And KCM keeping current matters.one of my favorite websites. I, I go to them frequently. They came out with some charts, that kind of compiled everything. So the first thing I want to talk about is mortgage rates. And Melissa is going to put up a little chart so you can kind of see what KCM published today.
[00:01:25] And it's really interesting because the predictions are kind of all over the board. You know, the feds keep talking about, they have to do this. they have to do that to curb inflation. And now they're talking about, I think the latest it's hard to keep track of it all, but possibly three different increases into 2022.
[00:01:45] Now the, the reason we keep talking about this is because it affects the buyer's ability to have a budget within their monthly income. So if the interest rates go up, then the affordability goes down because their payment is higher or they just lose a certain amount of purchase power.
[00:02:08] So for example, the interest rate goes up too much then somebody who was qualified to buy a $400,000 house now might have to go down to a $350,000 house. And that's a little bit of a dramatic example, but that's kind of what we're talking about and it's why buyers and sellers need to both pay attention to this.
[00:02:28] So we're looking at possibly having rates go up to the fours, but, you know, we'll have to see. Like I keep saying, we've been talking about the federal reserve bank, raising rates since the crash and a couple of times they've done it. And sometimes it was absorbed into the market and sometimes it wasn't. So we'll just have to see, but that's number one is mortgage rates and the reason the feds are doing it is to curb inflation.
[00:02:54] They're trying to use raising interest rates to bring down the prices of things, to try to slow down the acceleration of price increases. And it's not just houses, it's everything right. Anyway, so that is, that is number one. And I'm thinking it's going to impact mostly the entry level buyers and the sellers that may not have as much equity as the rest of the folks or the sellers that want to buy so bigger, or so much more expensive or a more expensive area that they can't quite pull it off. So I think those are the two market categories that are going to get hit first and get hit hardest. Okay. So that's number one, mortgage rates.
[00:03:39] Number two prices. So we've had an extreme hyper acceleration in prices all over the nation, but hugely in Southern Oregon,. It's just been quite shocking. And a lot of people are taking profit. They're selling their properties and either going somewhere else, less expensive or they are using that equity for something else or they're buying bigger.
[00:04:04] But the point is. That's not sustainable. You can't have that happen long-term so the prices have to stabilize anyway, regardless of the interest rates, the prices need to come to some kind of, I don't want to say plateau because there's always a little, you know, up and down, but the prices need to start to stabilize and normalize. But we, a lot of us have been saying all year, it's going to stabilize and normalize at a higher place. Where maybe two years ago we were down here.Then we had this hyper acceleration. Now we're going to settle, maybe not in the middle, but kind of in the upper upper third. So the, the experts are predicting normal appreciation all the way up to flat. So my experience with the market right now is that we are flattening.
[00:04:52] And it is, you can see it going up and down, but I'm watching the back on markets. I'm watching the canceled listings and people that just gave up and I'm watching the price changes and you put that all together. And to me personally, it indicates the market is trying to settle down. And then you throw in some higher interest rates and three rate raises in 12 months is kind of kind of extreme, but like we keep saying, we don't really know if they're going to do it or not.
[00:05:20] So the prices are not due to go up very much more and in some cases flatten out, but I also want to point out, nobody thinks there's going to be a Crash, okay. So if you're waiting for a huge correction we just don't see that at least in 2022. Okay. So that's number two prices. The experts are predicting a normal appreciation in 2022 all the way down to a flat, no more accelerated prices, but also no crash.
[00:05:50] Okay. Number three is the quantity of home sales. So if you have all this going on, all at the same time and we're coming out of the pandemic response then the next question is, well, how many houses are actually going to be purchased and sold in 2022? So we have a little bit of a range here. We have some of the experts predicting that it's actually going to go down a little bit, because that group is predicting still a shortage. And we've noticed that some of the quantity of homes sold have gone down because there just wasn't inventory. And then we have all the way up to an increase because, and this is where I agree, is that more and more people, at least in our area are putting their house on the market. And so it's, it's creating more transactions.
[00:06:39] So we'll have to see next year who's right. But it's not predicted to be a huge range of number of houses sold. It's anywhere from kind of flat to slightly down, to slightly up. So that's number three is the experts are also predicting that the change in the quantity of homes sold in 2022 can be anywhere from a slight decline to a flat to, little bit of an increase and that has to do with ongoing shortages because sellers still are not putting their houses on the market. That's the prediction all the way up to more and more sellers are putting their house on the market and it's creating more inventory and the backlog of buyers can just have a feeding frenzy.
[00:07:23] Okay. Which I'm more in that camp only because I am in the combat zone. I jokingly call it every day and because I'd seen so many more listings come on in all price ranges and they're getting absorbed at a little bit slower rate. So to give you an example, And we have more inventory coming on. And the people that are, that are putting houses on the market that are move invready, either priced to sell or priced in the medium range, they're getting showings, but they're not getting as many, some of that has to do with the weather, but not a lot because we actually have what almost feels like a springtime market early spring.
[00:08:01] You might have fewer showings right now, but I'm telling you the buyers that are out there, they're serious as all get out. And they're writing offers. The number of multi offers is gone down quite a bit. So again, we might've put a house on the market $400,000 last year and maybe had six offers. Now you might get two, and they're far apart.
[00:08:26] So it's just, again, I'm thinking it's leveling off, it's settling down and that's actually a good thing, folks. That's a good thing because that is sustainable. A lot of us just need to catch our breath. A lot of the people that have been waiting to sell a house or buy a house because they really want some certainty in the market before they pull the trigger.
[00:08:48] This should be your year. Okay. I'm a fan because I have a high risk tolerance. Personally I like jumping in when there's chaos, because I just have that personal philosophy that that's where the best opportunities are, but that's also the highest risk. So if you're a little more on the wait and see side, I'm thinking this could be a great year for you.
[00:09:09] Things should settle down. You're going to have some indication of interest rate pretty early on. And then you can make your plans. Okay. So that's all of our predictions from KCM who compiled several different experts nationally. And we'll have these charts up for you and you can look at them yourself.
[00:09:30] In the meantime, I am available. Yeah, I would love to be your agent. I'm great listing agent, great buyer's agent. Worked with a lot of first time home buyers, a lot of elders, downsizing and tons and tons of investors. So give me a call, give me a text 541-301-7980 that's 541-301-7980. Have a beautiful Southern or weekend.
[00:09:54] We'll see you again next week. Bye.