The number one question most real estate agents are asked right now is "What is the market doing?". The best way to answer that question is to watch the market statistics and listen to the various industry experts who are trying to make educated guesses about 2022. Below are some of the recent quotes from various industry experts:
Lawrence Yun, NAR Chief Economist
"Pending home sales faded toward the end of 2021, as a diminished housing supply offered consumers very few options. Mortgage rates have climbed steadily over the last several weeks, which unfortunately will ultimately push aside marginal buyers."The market will likely endure a minor reduction in sales as mortgage rates continue to edge higher. The combination of a more measured demand and rising supply will bring housing prices better in line with wage growth."
George Ratiu, Manager of Economic Research, realtor.com®
"Contract signings declined again in December, with a 3.8% monthly drop, as buyers faced an all-time lowest inventory of unsold homes. Pending home sales were 6.9% below year-ago levels, with both monthly and yearly declines registering across all geographic regions. While the index declined in seven of the 12 months of 2021, the yearly value was above the prior two years, pointing to increased overall housing activity, also mirrored in the higher pace of sales.
"These trends are continuing in January 2022, with realtor.com®’slatest weekly housing data spotlighting continued competitiveness despite a sharp rise in mortgage rates. Homes hitting the market are selling ten days faster than a year ago before being snapped up by buyers, who are likely concerned about even higher interest rates in the months ahead. At this pace, I expect the spring buying season to start well before trees begin to sprout new buds."
Sue Yannaccone, Chief Executive Officer and President of Realogy Franchise Group
"Real estate is entering a new era. The pandemic-fueled frenzy we saw over the last 24 months is giving way to a new kind of real estate market – one that will be driven by solid and sustainable demand we haven’t seen in over a decade. Prior to 2020, there had been around 5 to 5.5 million resale home transactions a year. The market was effectively stuck at a stagnant level of homes and home buyer demand. The pandemic and lifestyle changes that followed, such as remote and hybrid work styles that have opened up the freedom to live and work from anywhere, have helped unleash new dynamics in the market. And we’re starting to see it in action already: 2020 had 5.6 million resale transactions, while 2021 is shaping up to have around 6 million resale home transactions, according to the National Association of Realtors.
In 2022, we may very well experience the year of the Millennial home buyer, with Gen Z (already in their early 20s) close behind. With remote and hybrid work decisions freeing these populations from the constraint of a daily commute and an increasing demand in home office space, we expect to see this demographic evolution continue to fuel the market. As we enter this period of sustained demand, inventory will be the metric to watch.
Lauren Bunting is a Broker with Keller Williams Realty of Delmarva in Ocean City, Maryland.
