Zillow's Forecast For The 2022 Housing Market
What will 2022 look like for the real estate market? While nobody but Marty McFly can definitively tell us what's in store for the upcoming year, just about everyone has their theory and Zillow is no exception. Matt Curtis breaks down Zillow's 2022 Housing Market Predictions and how they compare with his own.
Let's Break Down Zillow's Predictions
The last few years in real estate have positioned us in the record books. We have seen historically low interest rates, supply shortages and a pandemic creating a seller’s market unlike anything we’ve ever seen before. Zillow believes that 2022 will fall short of record-breaking but will remain strong.
According to Zillow the hot sellers market we’ve become accustomed to will cool slightly. This does not mean a real estate crash or housing bubble. Zillow believes we will continue to see a strong real estate market and is estimating that we’ll see increased price growth and sales volume with predictions for 11% growth overall.
Data supports Zillows forecast that we’ll continue to see a seller’s market but less aggressive as the number of homes sold above list price will likely decrease and average days on market will steadily increase.
What Factors Influence Zillows Predictions?
There are several factors that contribute to Zillow’s predictions.
One - The US under-buildling by 4 to 5 million homes after the 2008 recession. This has directly impacted the supply shortages and fueled the sellers market we have experienced.
Two- The increased capability of remote work. There has been a mass exodus from expensive cities to locations with a more affordable cost of living as work from home capabilities have expanded post-pandemic. Cities like Huntsville and sunny locations referred to as the “sun belt” have become hot destinations for people relocating nationwide.
With the Great resignation and an aging population, traditional retirement markets are likely to see increased demand as well.
Three - We will likely see US demographics play a role in the market as Baby Boomers and Millennials are now competing for homes. This increases demand with a continued lack of supply.
Lastly, low mortgage rates. While we expect mortgage rates to rise slightly, we don’t see them rising enough to significantly shift the market in 2022.
All these factors considered, Zillow predicts we will continue to see bidding wars throughout the spring and summer as more buyers hit the market during the warmer months.
What You Should Expect in 2022
While the real estate market has been hot, the rental market has experienced it’s own heatwave too and Zillow predicts 2022 will be no different. With home values continuing to increase, rental properties will be in high demand as it becomes harder for people to save for down payments.
In the upcoming year we will continue to see new construction put a dent in the housing gap. However, it will not be enough to fully catch up in part due to supply chain challenges and labor shortages which we expect will continue well into the year.
Our data aligns with Zillows predictions that 2022 will continue to be a hot market but will inch away from the historic numbers we’ve seen over the last few years.
If you’re wondering how these predictions will impact my plans for 2022, I plan on purchasing real estate in the upcoming year as a hedge against inflation.
Real estate is still the best way to build wealth and we would encourage you to know your options if you’re looking to buy or sell.
Contact the Matt Curtis Real Estate team and let us talk you through the options best suited to you!
Posted by Matt Curtis