What Does 2022 Have In Store For Real Estate?
2021 saw many homebuyers drop out of the market. This was unsurprising considering less than 30% of Americans thought it was a good time to buy a property. On top of that, property prices grew by almost 20% year-on-year. But what will 2022 have in store for the real estate market?
Foreclosures will Increase
The U.S. put a ban on foreclosures at the start of 2020. They were legally allowed again from the start of August 2021, however many lenders put a halt on them until the end of the year. But there is expected to be a large increase in them in 2022. Four in ten people say they think there will be more foreclosure properties for sale next year. The public aren’t concerned about buying these types of properties either. A recent study found that 62% of people would consider investing in one. Plus, 250,000 people who were part way through the foreclosure process before the ban are currently being put back into the process.
Property Prices will Rise
In November, Zillow predicted that house prices between October 2021 and October 2022 will rise by 13.6%. Goldman Sachs predicts a similar annual growth of 13.5%. The good news is this is a lot lower than the 19.9% rise seen this year. But it does mean property is becoming more unaffordable for some Americans. There are, however, some options for these potential buyers.
As more people are pushed out of the market, home purchase loans will become more common. If you haven’t heard of this type of loan before, you might wonder what is a home purchase loan? Home purchase loans are when the seller and buyer come to a financial agreement together. No mortgage lenders are involved. Instead, the seller may let you take over their mortgage or you may be able to pay regular installments to the seller directly.
There has been a shortage of houses on the market recently. Fortune reports that between April 2020 and April 2021, inventory dropped by more than 50%. This meant that buyers were having to make do with what was available. Many were also losing out on properties due to bidding wars and buyers offering to make cash purchases. All that will change in 2022 if current statistics are anything to go by.
In September, there were more properties on the market than there had been all year – a sure sign that things are picking up. Nicole Bachaud from Zillow predicts 2022 “will probably be a little less stressful for buyers as there are more options”. More options mean less competition and a better chance of securing a home. Plus, there will be even more housing options for buyers if the number of foreclosures increases as predicted.
2022 will be an interesting time for real estate. Some trends from 2021 will continue into next year and beyond. However, some things will take a whole new direction.