Many housing investors, prospective homebuyers, and current homeowners are anxious for what 2022 has in store.
The housing market has been wild over the past two years. Prices surged to record levels. Inventory is still at or near record lows.
“The 2022 housing market will continue to be a seller’s market with fast-moving homes and rising prices,” says Realtor.com Chief Economist Danielle Hale. “But the competition should be a bit less intense than we’ve seen recently.”
First off, the market is still expected to be extremely volatile. Columbus is ranked as the 5th hottest housing market in the country going into 2022, primarily based on the growth of home prices.
“…cost-conscious homebuyers will seek out affordable northern cities like Columbus, OH, Harrisburg, PA, and Indianapolis, which all happen to be capital cities with highly educated residents where the median home price is still less than $250,000. Columbus, Indianapolis, and Harrisburg have all seen the number of homebuyers moving in minus the number moving out more than double since last year. Homebuyers tend to seek out Columbus for its central location and highly rated schools” -Redfin
Increasing home prices are great for current homeowners. They’ll see the value of their home continue to appreciate. However, it will likely make the market even less accessible for homebuyers who wait. This will be exacerbated by rising mortgage rates.
Another issue is the fact that rents are outpacing home prices at the moment, predicted to do so by 7.1% in 2022. Renters will find themselves in a tough situation. This will continue to fuel home buying demand and keep a floor under the housing market.
Not everything will be as extreme as 2020 or 2021, though. Home prices are still expected to increase, but not at the elevated rates of the previous 2 years.
Inventory is predicted to increase by 0.3% in 2022. That may not seem like much, but at least that means it won’t be decreasing at an alarming rate anymore.
In fact, Redfin predicts that new inventory will soar to a ten-year high. That will be welcome if it comes true, but it wouldn’t even make a dent in the housing shortage. It would help normalize the market though. One of the issues causing low inventory is that homeowners can’t sell if there’s nowhere to move to.
It’s also expected that building supplies will no longer be scarce. More new homes can be built around the suburbs of Columbus. Plus, the advent of working from home means that location is not as crucial when purchasing a home. That makes it easier for homebuyers to look to the suburbs and exurbs where there’s space for new homes to be built.
Sum It All Up
Overall, 2022 may be more of the same in the short term. Inventory will still be low, prices will still be high, and growth will still be rapid. However, as the world begins to open up more and more, it seems like the beginning of a new trend in the market. Hopefully, one that is more normal than the last two years.
I don’t know if the predictions above will come true. It is highly likely that interest rates will go up, off-setting any slowed price growth. Now is actually a great time to buy. Rates are still low, and winter is usually the best season to get a better deal on a home for sale.
The Seller’s Market isn’t going away anytime soon. There’s simply too much pent-up housing demand. If more inventory comes on, that would actually be great for home sellers who need another home to move into. If you’re thinking about listing your Central Ohio home for sale, you have more options than ever! Call/text me directly at 614-547-3229 to learn more.