Showings over the Thanksgiving holiday dropped more than last year but not as much as two years ago in 2019. Showings had a strong rebound the first part of December last year, but new listings didn’t dip as much after Thanksgiving as they did this year. It continues to be inventory that is holding back sales.
No one has a crystal ball, but this is the time for 2022 predictions. Here are my comments on five predictions from Realtor.com.
PREDICTIONS AND TRENDS TO WATCH FOR IN 2022
Homebuyers moving to where they want to live rather than close to their office… for many, suburbs are the place to be
The trend of moving out of core urban areas to more space inside and out was already starting in 2020 after Covid shutdowns when people started living, working, playing, schooling at home. That also caused many businesses to re-examine the workplace, and now one in five homeowners no longer need to live near their office. This gives them flexibility to move further out… to suburbs, small towns and more rural areas, even other parts of the country.
This is the prediction of Realtor.com. Personally, I saw this trend very evident the last 18 months or so… but now there is a trend for some businesses to start bringing staff back into the office. As people miss face-to-face contact and the stimulation of personal interaction, I predict we will see this trend slowly begin to reverse itself… the proverbial pendulum swing. We are basically social creatures. While a change can feel good for a while, in the end it will be what personally nurtures us that will win out… and that is different for everyone because everyone is naturally wired differently.
The biggest takeaway from this trend is people will have more options as to where they live and work… dictated more by personal choice than work mandates.
Millennials are eager to finally move… and many of those age 55+ are eager to downsize
Prime first-time homebuying age is 26-35, and many of the 45,000,000 millennials will hit this “homebuyer sweet spot” in 2022.
A hard part of this trend is first-time homebuyers and 55+ers are often competing for similar properties which are in short supply. The key to getting this trend flowing is to not only get downsizers to sell their homes, but also to get GenXers to move up and sell their current homes to increase supply for first-time homebuyer and downsizers. Many 55+ers and GenXers are afraid to put their homes on the market for fear of having nothing to buy and nowhere to live… creating a logjam.
Hispanic home buyers rise
Nationwide, Hispanics account for more than one out of 10 recent homebuyers. This group is expected to play a growing role in the home buying market.
Affordability challenges continue as prices and rates increase
It is expected that home prices, rents and mortgage rates all will rise in 2022, but prices will rise at a gentler rate than the crazy increases in 2021 as mortgage rates increase to 3.5%-3.6% by the end of 2022. Realtor.com predicts that in the Minneapolis-St. Paul area home sales will rise 4.1% and prices will rise 6.0% in 2021.
PREDICTIONS FOR THE 100 LARGEST US CITIES
More homes come on the market
There is some hope for buyers who have been frustrated by low inventory. Realtor.com predicts a 6.6% increase in inventory in 2022. Let’s hope this prediction comes true or is surpassed.
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com