If you’ve been pondering a move for some time and feel like 2022 might be the year, you’ve come to the right place. Let’s talk 2022 home prices and how they could affect your decision.
Home appreciation rates
Since the beginning of 2020, it’s been a seller’s world that we’ve just been living in. Housing prices have been on a moderate-to-steep increase, with home appreciation rates reaching a three-year high in August 2021 at 17.7% according to recent studies from Zillow.
Unfortunately, home appreciation is not gratitude-related, even though we all appreciate being fortunate enough to have a roof over our heads. Appreciation, defined by Investopedia, is “an increase in the value of an asset over time.” Main factors that affect appreciation include increased demand and/or a weakened supply chain.
The biggest factor behind these historic appreciation highs is the recession caused by COVID-19. While housing inventory is on the rise, it’s still below pre-pandemic levels, meaning that current buyer demand still isn’t being met and that as a result, home prices are higher.
The skinny on 2022 home prices
Okay, great, you’re up to speed. But what’s in the forecast for 2022?
Zillow is currently predicting an 11.7% appreciation rate, but they are alone in this bold estimate. Other real estate thought leaders, like CoreLogic, are only predicting a price growth rate of between 2-6%.
A key takeaway here is that home prices are forecasted to increase no matter what, whether it’s by 2% or 12%. And an even bigger takeaway to remember is that home appreciation and depreciation are extremely difficult to forecast, as proven by global events like COVID-19.
So, is this data meaningless? Not necessarily.
For sellers
If you’re looking to put your house on the market, the odds and data are still in your favor as a seller and will allow you to list without being overly competitive with pricing. Especially if you bought your property prior to August 2021. But Zillow says to remember that inventory is also continuing to rise, so it’s better to list now rather than later before the market cools off in the next three years.
Ready to list your property? Great. We’ve got a thorough guide to get you started. Browse it here.
For buyers
If this isn’t the news you wanted to hear, we’re sorry! We’re just the messenger. But if 2020 and 2021 didn’t strike you as the right times to buy a home, you may want to hold on for a little longer. While appreciation is slowing down, home prices are still increasing and probably won’t fall into your comfort zone in the next year unless you get a big raise at work.
Want to buy in 2022? Let’s start with the basics. Learn more.
For those staying put
A new year doesn’t have to mean a new home. Keep a watchful eye on the housing market in 2022 and see what forecasts come true or fall flat. And while you’re waiting to move, you can take on a fun home reno project that may breathe much-needed new life into your home.
Need a contractor? We can help you find a good fit. Read more.
Other upcoming real estate trends
Let’s get away from numbers for a little bit and talk about other real estate trends on the docket for 2022 that you can expect to impact the housing market.
- Redeveloped neighborhoods. In order to support demand, Anne Keshen with RMT Capital Management is forecasting that communities will need to put in work to revitalize older neighborhoods in addition to commercial spaces.
- More virtual tours. Virtual tours and other visuals are credited to driving nine out of ten millennials to tour properties they first spotted online, according to the National Association of Realtors. And millennials made up 38% of homebuyers in 2020. See the connection?
- Higher customer service expectations. Believe it or not, food delivery apps and other popular online platforms have made customers more expectant of quality customer service in their real estate ventures, according to Benjamin Pleat of Cobu. Can you relate?
Lean on us for help
No matter what’s in store for your 2022, ARAG can help you navigate real estate matters. If you’re a member and in the market to purchase your home, check your legal plan for coverages, and work with a network attorney who can review documents and attendance at closing. Call us at 800-247-4184 or start a case online at ARAGlegal.com/account.
