It’s likely that 2022 won’t be as red hot as 2021 was – though you can still expect some flames. While home prices will continue to rise, most experts are predicting 10% appreciation, rather than last year’s 20%. It will still be a seller’s market – however, multi-bid situations and homes going for 30% or 40% over asking may revert back to being anomalies, rather than becoming the new normal.
In other words, sellers shouldn’t rely on a crazy market when selling their homes. This past year saw plenty of sellers opting out of doing small fixes around the home and de-cluttering, on the assumption that their home would likely receive multiple offers anyway. That may have been so – but 2022 home sellers would be wise to prep a bit before their home sale.
“With such a substantial increase in price, we may start to see that buyers aren’t willing to pay so much over the appraisal value, and they may not be waiving appraisals. With the prices rising we may see buyers who can’t compete falling out,” explains Tampa-based listing agent Michelle Mandia about what to expect going forward.
After mortgage rates hit an all-time low last January, they’ve been rising – going from 2.65% to the current average rate of 3.10%. While it’s still a great time for homebuyers to buy a home – rates are still low, meaning that buyers can qualify for more house with less money – if rates continue to rise, we’re eventually going to reach an inflection point where buyers begin to drop out of the market.
“The thing to keep a close eye on this season is interest rates – interest rates have risen a little. I don’t think a fourth of a percent, half a percent, or even 1% is enough to deter people from buying, just based on what we’ve been seeing in the market – but that could change,” says Zebhideh. “Interest rates directly impact a buyer’s purchasing power. And that’s going to trickle down to buyers being more of a pain during the transaction as well.”
The future is uncertain: rates could go up and down (although most experts believe they will go up to a high 3% or low 4% this year). Fall 2022 and beyond could be a great time for sellers, or more of a market equilibrium may develop. Rather than trying to play the market, consider the cards you currently have in your hand: you know now is a good time to sell because competition is high and inventory is low. Selling in spring 2022 means cashing in when the market is undeniably great for selling.