2022 Housing Market Predictions

Though not predictable, you can always rely on the real estate market in Sonoma & Marin County to change. Here are some predictions for the housing market in 2022.

• 2022 will fall just short of record-breaking

" So far, home price appreciation is up year-over-year (YOY) by 18.5% in the third quarter, the highest level in the Federal Housing Finance Agency (FHFA) House Price Index history. Inflation has shot up at the fastest pace since 1982. At the same time, the number of houses for sale has dropped, creating greater pressure on home prices. Housing supply plunged to its lowest level in history, with just 1.38 million homes on the market in June, down 23% annually. Buyers scooped up homes faster than ever before, shrinking the number of days homes spent on the market to a record-low of just 15 days. Forbes (https://www.forbes.com/advisor/mortgages/housing-market-predictions/)

• Mortgage rates may rise, but inventory may rise as well

"The market is likely to cool compared to 2021, but it will still be active… It may still be a seller’s market in many areas, but there’s likely to be more opportunities and wiggle room for homebuyers. A ‘priced out’ buyer should be able to find many more options. Experts also reinforce that 2022’s housing market is not at all likely to crash — the conditions we’re seeing are nothing like those that led up to the crisis of 2008.” Andrina Valdes (https://finance.yahoo.com/news/where-home-prices-headed-2022-200001201.html)

• **Rents are expected to outpace home price growth over the next year ** "Nationwide, rent growth went from minimal to double-digit pace in 2021 as the U.S. made substantial progress against the pandemic. With the rental vacancy rate continuing near its historic lows during the pandemic, in which just 5.7% to 6.8% of rental housing units are vacant at any point in time compared to 7% or more, historically, renters are also contending with limited supply and excess demand that leads to upward pressure on rents. In 2022, we expect this trend will continue and fuel rent growth. At a national level, we forecast rent growth of 7.1% in the next 12 months, somewhat ahead of home price growth as rents continue to rebound from slower growth earlier in the pandemic." Realtor.com (https://www.realtor.com/research/2022-national-housing-forecast/)

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