Happy New Year! I hope all of you had a peaceful and healthy holiday season.
Most of us are stepping into 2022 with careful toes. Everything is so unpredictable right now that it seems strange to try and foresee what will happen over the next 12 months.
Even so, economic experts have started releasing their predictions. I find this valuable information in January as I prepare for the business year ahead and I would like to share this information with you.
Here is a quick summary of what I learned from Matthew Gardner, economist for Windermere, this past week:
Home Prices
The US home sale price to have a year over year increase of 6.4% in 2022. Compared to last year’s 16%. This is a stabilization from the double digit increases we saw in most areas, but still above the historic average.
King County average sale price is $1,050,000. Wow! King County will see 8.9% appreciation this year (2021 it was 18.5%).
Snohomish County average sales price is $746,000. 2022 likely will have a 9.3% increase in sales prices (2021 it was 19.8%).
Pierce County average sales price is $556,000. Double digit 11.9% appreciation predicted for 2022 (2021 was 19.2%).
Mortgage Rates
The FED will increase mortgage rates likely three times over this year. Mr. Gardner’s prediction is we will be at 3.6% by end of year. Other predictions range from 3.2% from Fannie Mae to 4.0% from the Mortgage Bankers Association. This increase is not thought to slow real estate sales. Not until rates get to around 5% we may see some slowdown in buyer demand.
Inventory AKA the number of homes available to Buyers
Interesting fact: The number of homes for sale in all of King County in December was only in the mid 300s! This is the lowest Mr. Gardner has ever seen and he has data going back to 1999.
Hey – that’s the year I moved to Seattle!
Low inventory is going to be in issue through this year. Poor buyers.
Bubble? What about foreclosures from forbearance?
Nope.
None of the economists who I follow predict any kind of real estate bubble. Most homeowners in our area have more than 50% equity. Forbearance rates have been on a decline and many of the ones who end up selling because of forbearance have enough equity to not go into foreclosure.
What are your plans for 2022?
Do you have real estate plans this this year? Or know a friend who would like some expert help on a home sale or purchase? Please contact me early and we will get a plan of action put together!
If SELLING this year – congrats, it is still a sellers market! Mr. Gardner notes (and I agree) that Sellers can no longer ask and receive whatever price they want for their homes. Sellers have to be realistic about the stabilization in prices. But hey – you got the double digit appreciation of last year and if one can predict we are somewhere at the top end of a major upswing.
If BUYING this year – don’t worry. Rates are still historically low and with some patience and a good plan you will see success.
Please let me know if you have any questions about these predictions, or anything about or local housing market.
Positive thoughts and a lot of SISU forging ahead into 2022. Let’s do it!
Want to see the entire economic forecast by Matthew Gardner, including his thoughts on inflation (not a big deal) you can find it HERE.