We are seeing home after home sell quickly to buyers making offers well over the asking price, often without contingencies, and with great terms for our Sellers. Buyers continue going to great lengths to ensure that their offer is sufficient to win in multiple offer situations; or are buying new construction homes, depsite the lack of flexibilty that builders are offering and the uncertainty of delivery date due to supply side issues. From 2020 on we have seen month after month of price increases which begs the question, will we have an adjustment in The Triangle and if so; what will it look like. We have compiled information from the leading sources on inflation, mortgage rates, and what the market did in October to help explain prices. Let’s look at what we might expect in 2022 for home prices. Peering into our "crystal ball" here are our predictions for the local market in 2022 as well as what various experts are saying.

A Look into The Market Past

March of last year brought MANY changes and the real estate market looked to be headed into a steep decline due to pandemic related stay-home orders. However, homebuyers, supported by low-interest rates, have continued to snap up inventory even as prices have continued rising. The residential real estate market has been incredibly resilient in the face of the pandemic and the housing market bounced back in 2020 faster than other sector of the economy, and this growth has continued into 2021.

2020 was a record-breaking year for the US housing market. In The Triangle in particular, we saw sustained growth as the technology and pharmaceutical industries grew, and people found the Raleigh Durham area desirable both to move or retire to. According to Zillow's most recent analysis {October 2021} The Raleigh / Durham area saw average monthly home value appreciation of 2.7% this year. This report indicates that throughout the Triangle the average home price is now $371,895 up 26.9% from October 2020.

Homes are quite simply, worth more right now. The typical U.S. home was worth $266,104 in December, up 8.4% (or $20,587) from a year ago. A total of 5.64 million homes were sold in 2020, up 5.6% from 2019 and the most since before the Great Recession, according to Lawrence Yun, NAR's chief economist. According to Zillow, the current value of homes in the United States as of October 2021 is now $312,728 up 19.2% year over year. Here in the Triangle the average home value is currently $372,500. Currently Zillow's report indicates that as of the end of October 2021, there was 18% less inventory on the market for sale than a year ago.

Since Mortgage rates remain at record lows and there is a lack of available inventory, the US housing market's demand is clearly sustained. Affordability concerns are present, however, low mortgage rates, increased savings, and an extremely solid local job market contribute to making homeownership accessible.

A Look into Housing Market Present

Low mortgage rates, coupled with work-from-home possibilities created by the pandemic, fueled a rise in housing demand. We especially see this in lower-density suburbs, as we have in areas of The Triangle. Detached single-family are in the highest demand because they offer greater living space and amenities with physical space separating them. Raleigh Durham and Chapel Hill have booming job markets, space for the development of more single-family home communities, and has been one of the areas to grow most and whose real estate is in high demand. The question we keep getting is, "Prices cannot keep going up, can they?"

The nationwide median listing price for active listings in October 2021 was $380,000, up 8.6 percent from the previous year and up 21.8% compared to 2019. The median national home price for active listings remained the same from September through October. Active listing prices in the nation's largest metros grew by an average of 5.2% compared to last year, slightly higher than last month's rate of 4.1%. For these reasons, Zillow predicts they will rise 13.6% over the next twelve months. This is nationally and locally we anticipate home values will rise 15-16% over the next 12 months.

A Look at Future Home Prices in The Triangle

According to Realtor.com®, many areas that experienced bidding wars earlier this year are now experiencing a longer time on the market, and some are seeing price reductions; bringing asking prices back down to earth. While the market continues to be active, there are fewer some areas are experiencing a cooling off in terms of competing offers and in these markets contingencies have returned, bothExisting Home Sales By Region of which are clear indicators of a healthier housing market. This hasn't been the case in the Raleigh-Durham, Research Triangle area so far, nor do we anticipate this happening in the next 12 months. It should be noted that Zillow currently ranks the Raleigh Durham real estate market as the fastest appreciating market in the country.


housing market forecast 2022

According to The FMHPI, which is an indicator for typical house price inflation in the United States and it indicated that home prices increased by 11.3 percent in the United States in 2020. According to FMHP, growth is expected to slow to 7 percent in 2022. The pace of home sales has cooled since the first quarter of 2021 when it was at 7.2 million and Freddie Mac predicts home sales to hit 6.8 million for the full years 2021 and 2022. Locally in the Triangle, we expect appreciation to slow but only a little and believe it's reasonable that over the next few years prices will see between 30-50% total appreciation from where they are today.

Interest rates will likely go up during the coming year and some lenders and economists are predicting that they may reach 5.5% which; historically is still well below the average rate over the past 10 year, 20 year and 30 year periods. Since we are expected to have a higher mortgage rate forecast for 2022, many lenders anticipate refinancing activity to slow, with refinancing originations declining from $2.6 trillion in 2021 to just below $1.0 trillion in 2022.

While we are seeing many new construction opportunities locally, real estate we believe will still appreciate at a faster-than-average rate through 2022 because the inventory is still constricted and the buyer demand continues to outpace supply. According to CoreLogic, home prices nationwide increased year over year by 18.1% in August 2021 compared with August 2020, which was the largest annual gain in home prices in the 45-year history of the CoreLogic Home Price Index. The bottom line is that builders on The Triangle will be unable to build enough inventory and we don't anticipate a flood of foreclosures hitting the market.

If you are thinking about selling, you should really consider taking advantage of the high prices AND the low mortgage rates, because while the prices will continue to rise, so might the mortgage rates, making home buying less affordable for those financing. The Brokers at My NC Homes has represented both buyers and sellers in The Research Park Triangle for decades, we understand the market influences and are here to help you decide when it's right to buy and when to sell. Let us help you take advantage of the market conditions and make your move in the coming year.

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