2022 Real Estate Market Preview
Real Estate 2022 and THANK YOU!
I’m the type of person who likes to stay under the radar. Real estate in our area this year did anything but stay under the radar; so needless to say, I could not do that since I was knee deep in it. Even if you were not in the market, you knew 2021 was a sizzling year for most of the residential real estate market. The stories of multiple offers, buyers paying sellers closing costs, homes selling in hours, selling without inspections, buyers letting sellers staying in their homes for months after closing (many times for free), buyers paying thousands over asking price and forgoing appraisals were true in many transactions.
This was all due to a lack of inventory, historically low interest rates and pent-up demand from Covid. Covid made homeowners rethink how they use their homes. For good or bad, Covid changed the way we think about where and how we work.
The Columbus metro area had been immune to large up and downswings in the residential real estate market. The last two years have been a bit of an anomaly as we had double-digit percentage increases in the number of homes sold and the prices of homes sold. While I believe we will see strong increases in 2022, they will not be the same as the last two years.
Will sellers get multiple offers? Yes, but I think instead of five or more offers, they might get two. Will buyers forgo inspections and appraisals? In most cases no. Sellers will have to reset their expectations from homes selling in a weekend and they will have to prepare for houses selling for list price or below list price. Of course there will be many exceptions, but the tide will turn back to a historically good market, just not a frenzied market. Why?
A combination of factors will give the market a little time to breathe. Interest rates will start moving up. It seems the consensus among people in my industry is that interest rates will be between 3-4%, probably maxing out in the 3.75% range. This is historically low but many buyers got spoiled by the 3% or less range. Inflation will have both a positive and negative effect. Many buyers, especially in the higher price ranges, will move assets from the high valued stock market to hard assets like real estate. This is why I think first time and move up buyers will be in a normal, balanced market but higher end homes will still be closer to the frenzied market. Inflation will increase the price of homes but, because buyers have to pay more for cars and other expenses, debt ratios will price many buyers out of the market, especially first-time home buyers.
As mentioned, I like to stay under the radar so it’s hard for me to admit that 2020 was my best year ever and now 2021 looks like it will be better than that. Of course the record markets helped but, more importantly, your support over the last 30 years has made this possible. As many of you know 2021 was my year of milestones. I turned 60 is September, celebrated 30 years in real estate as well as 25 years of volunteering at Kobacker House. My sons Niko turned 21 and Luka turned 18 so, needless to say, I have done a lot of reflecting.
All of this reflecting brings me to one thought, gratitude.
Along with Linda, Niko, Luka and Ringo, we thank you from the bottom of our hearts for supporting us through the last 30 years. I don’t plan to do anything differently and I hope you will continue feeling confident when referring me to your friends and family and trusting me yourself when it comes to your real estate needs. I have been blessed and my family and I thank you!