2022 Real Estate Trends

If you’re looking for some relief in the crowded and competitive housing market in 2022, these 2022 real estate trends may lend some hope.

 

“With more housing inventory to hit the market, the intense multiple offers will start to ease,” according to Lawrence Yun, the National Association of Realtor’s chief economist. “Home prices will continue to rise but at a slower pace.”

 

Take a look below at the trends Salem News says will affect buying and selling in 2022.

 

1. Mortgage Rates Will Continue Rising

Mortgages rates are predicted to rise to 3.6% by the end of 2022. What does this mean for home-buyers? Assuming rates rise from 3% to 3.6%, a $300,000 loan will cost buyers an extra $100 per month.

 

2. Buyer Demand, Competition Will Decline

Redfin’s chief economist, Daryl Fairweather, sees a shift toward a less frothy market. “2022 will bring more balance to the housing market,” she says. “But don’t expect a buyer’s market; just more selection, less frenzy, and slower price growth.”

 

3. Home Value Appreciation Will Slow

A NAR survey of more than 20 economic and housing experts predicted that annual median home prices would increase by 5.7%, far less than the previous year. NAR chief economist Lawrence Yun, “Slowing price growth will partly be the consequence of interest rate hikes by the Federal Reserve.”

 

4. New Home Construction Will Increase

Mike Fratantoni, the chief economist at the Mortgage Bankers Association, sees the supply shortage starting to ease in 2022, leading to additional inventory hitting the market. “Home-builders will have more success overcoming current building material shortages and should be able to increase the pace of construction to meet the sizable demand for buying,” he said.

This will be an interesting 2022 real estate trend to keep a beat on. According to Random Lengths, lumber prices are now about 22% lower than peak but still about three times their average pre-pandemic price.



5. Investors Will Continue Buying

Danielle Hale, chief economist at Realtor.com, notes homeowners preparing to sell are in a good position going into 2022. Home values are predicted to continue their upward march, albeit at a slower pace.

 

Click here to read the entire Salem News article.

Lumber prices soar!

Up 218% in the past five months to $1,238 per thousand board feet!

Material shortages and lack of skilled labor have caused headaches for remodelers and homebuyers across the country, causing delays in remodeling projects.

Despite these challenges, NAHB reported that remodelers’ sentiment continued to improve, with the NAHB/Royal Building Products Remodeling Market Index (RMI) staying well above the benchmark point of 50.

“Every sub, vendor, and supplier is as busy as they’ve ever been,” Matthew Emmons, president of Emmons Construction in Jenks, said. “I think the concern moving forward is timing for completion and keeping quality at a premium during all the chaos of supply chain issues and labor shortages.”

Click here to read more.

Balance to Return to the Housing Market?

Redfin Chief Economist Daryl Fairweather has made her predictions on the state of the housing market in 2022.

Fairweather forecasts that balance will return to the market next year, but not after a scramble to snatch up homes with buyers taking advantage of low rates who will deplete the supply in the first half of 2002. In the second half, new construction will boost sales slightly, as there will be 1% more sales than in 2021, and by the close of 2022, home price growth will slow to 3%.

Some of Fairweather’s for 2022 are as follows

Prediction #1: Mortgage rates will rise and prices will drop
Prediction #2: New listings will hit decade-long high, yet inventory issues will linger
Prediction #3: Rents will continue to ascend and rise by 7%
Prediction #4: Homebuyers will relocate to more affordable cities
Prediction #5: People will relocate to places that align with their politics
Prediction #6: There will be a renewed interest in condos

Click here to read more details about each prediction! 

Seller Profits Increase Across U.S. In Third Quarter!

ATTOM, curator of the nation’s premier property database, today released its third-quarter 2021 U.S. Home Sales Report, which shows that profit margins on median-priced single-family home and condo sales across the United States jumped to 47.6 percent – the highest level since the end of the Great Recession a decade ago.

The report indicates a  typical home sale across the country during the third quarter of 2021 generated a profit of $100,178 while the national median home price hit a record.

Cash sales at a six-year high! Nationwide, all-cash purchases accounted for 34 percent of all single-family house and condo sales in the third quarter of 2021, the highest level since the first quarter of 2015. The third-quarter 2021 number was up from 33.2 percent in the second quarter of 2021 and from 21.4 percent in the third quarter of last year.

Click here to read more about profit margins and home ownership tenure. 

Homes Sell At Top Speed In A Typically Cool Homebuying Season

Redfin reports that one third of homes sold in the four weeks went under contract within seven days of hitting the market. The rate has been on the rise for the past six weeks, which is unusual for this time of year when the market typically slows down.

Experts assume the market is heating up due to steady homebuyer demand, and this is proven by the fact home tours are up twice as much from January as they were this time of year in 2019. Still, homes for sale remain few and far between.

“Homes continue to sell quicker and quicker,” said Redfin chief economist Daryl Fairweather. “There are still plenty of homebuyers lying in wait who missed out during the Spring frenzy and they are snatching up homes quickly. Now those homes are selling for near-record prices. The housing market will likely stay hot until mortgage rates rise substantially.”

Key Takeaways:

  • One third of homes sold in the past four weeks went under contract within seven days of hitting the market.
  • 45% of homes that went under contract accepted an offer within the first two weeks on the market.

Read more about days on market and inventory here. 

The median home price just rose above $400,000 nationally for the first time ever! 

The median home price just rose above $400,000 nationally for the first time ever!

The median U.S. home price just passed $400,000 for the first time ever, according to data from the St. Louis Federal Reserve.

In the third quarter the median home price hit $404,700, jumping nearly 13% since third quarter of 2020, when the median sales price was $358,700.

A recent note from Goldman Sachs states home prices could rise another 16% by the end of next year, and the latest forecast by Fannie Mae, median home prices are expected to rise another 7.9% between Q4 2021 and Q4 2022.

“The housing shortage has contributed meaningfully to the record pace of home price appreciation we are currently experiencing,” Morgan Stanley strategists wrote in August. “While the magnitude of the shortage described above means it is unlikely that we will find ourselves with an excess of supply at any point in the near future, the pace at which supply is contracting has slowed.”

Read the rest of the article from yahoo!finance here.

Home Prices Increased 19.7% from a Year Ago in July!

The latest edition of the S&P CoreLogic Case-Shiller Home Price Index showed that home prices increased 19.7% from a year ago in July, marking the fourth consecutive month of record growth in the more than 30-year history of the index.

“The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P DJI, in the report.
The big picture: The fast pace of home-price appreciation the market is now seeing is sure to continue to draw comparisons to the housing bubble back in the early-to-mid 2000s that — when it burst — largely formed the basis for the Great Recession. But analysts warn that the situation is very different right now.

 

“This market is rooted in much different (and far less dangerous) fundamentals,” Robert Kavcic, senior economist at BMO Capital Markets, wrote in a research note.

 

The last housing bubble was driven by the subprime mortgage boom, but regulations imposed since then mean that lenders must ensure a borrower’s ability to pay back any loan they receive. Instead, this time home prices are rising because of the short supply of homes for sale across the country, which is increasing competition for properties amid high levels of demand.

What they’re saying: “While late summer indicators suggest some buyer fatigue, home-price growth is likely to remain in double digits through the remainder of 2021,” said CoreLogic deputy chief economist Selma Hepp.

Click here to read the entire article

U.S. homebuilder sentiment rose in September

Why? Lower lumber prices and strong housing demand! 

According the the National Associations of Home Builders, Builders are enjoying some reprieve from easing material costs in a still-strong housing market, where home prices continue to march higher. 

“The single-family building market has moved off the unsustainably hot pace of construction of last fall and has reached a still hot but more stable level of activity,” NAHB Chief Economist Robert Dietz said in a statement.

Derived from a monthly survey that NAHB has been conducting for 35 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months. The report also showed that current sales conditions and prospective buyer traffic advanced. At the same time, sales expectations for the next six months remained unchanged.

Read the full article here. 

The 2021 Top States for Doing Business

Steven Kaelble, Staff Editor, for Area Development released an article: “The 2021 Top States for Doing Business Reflect Their Locational Advantages”

Below you will find snippets from the article relative to our area! 

Overall Cost of Doing Business

It would be tough to become the overall top state for doing business if your costs were out of hand, so it’s hardly surprising that our top state is also the leader in the category of overall cost of doing business. Georgia is the cost leader for the second year in a row. Tennessee and Texas are perennial top performers for their overall business costs, and they place next in the rankings, tied this time with South Carolina.

Site-Readiness Programs

We’re living in a strange time when you may have to wait and wait to obtain furniture, certain computer chips, appliances, and some new vehicles (and who can forget toilet paper shortages?). By contrast, it’s nice to find a great spot for development that is ready to go, with a head start on the necessary due diligence, infrastructure, and approvals.

Tennessee helps make this dream come true with well-regarded site-readiness initiatives, landing once again in first place in this category. What are sometimes called “shovel-ready sites” are known here as Certified Sites, and they’re all over the state, from a nearly 2,000-acre mega-site in middle Tennessee, to one more than double that size near Memphis, to smaller and mid-sized sites in every corner of Tennessee.

Available Real Estate

You can’t have site readiness if you don’t first have good available sites, so we asked our experts about this basic category, as well. Texas and Georgia tie for top honors when it comes to available real estate. Tennessee is an excellent choice for available real estate, too (and as mentioned above, much of that real estate is primed and ready to develop).

Cooperative and Responsive State Government

And then there are the factors that collectively can be seen as the “welcome mat” states place at the doorsteps of companies doing business within their borders. Some of this is reasonably measurable, such as the tax burden, and some of this is more of a subjective gut feel regarding which states are the most eager and welcoming, the best able to make helpful introductions on the local level, and the most willing to go the extra mile in tailoring incentive and training programs.

Our top five this year for most cooperative and responsive state government are the same as last year, with the order a bit shuffled. Tennessee moves up to second place, placing at or near the top of various rankings of business friendliness and positive climate.

Corporate Tax Environment

Speaking of cooperative, one of the most cooperative things a state can do is not be too burdensome with taxes. Lots of states boast about a business-friendly environment from the perspective of taxes, but our experts rank Texas as the best in this category. Rounding out the top five are Nevada and North Carolina, tied for third, and Tennessee in fifth place.

Favorable Regulatory Environment

Benjamin Franklin said nothing is certain except death and taxes, yet the previous category disproves the part about taxes, at least in some states. What about red tape? That feels like pretty much a certainty, too, but our final two categories highlight states that have found a cure for the most common hassles of location and expansion. Tennessee places sixth.

Speed of Permitting

Last but not least is the speed at which the permitting process moves. Permitting can be a nightmarish hassle, and it’s one of the things that states try to take care of in advance when they create shovel-ready locations.

Generally speaking, the Southern States are the speediest when it comes to permitting: Alabama, South Carolina, Georgia, Mississippi, and Texas, Tennessee, Virginia, and North Carolina, and Louisiana.

Click here to read the entire article, with more information regarding energy availability and cost along with logistics and infrastructure information,

U.S. Home Prices End First Half of Year on Even Stronger Note! 

U.S. Home Prices End First Half of Year on Even Stronger Note!

“In our last release, the Radian HPI reported that home prices grew at the fastest annual rate in over a decade and a half, and that momentum has not stopped yet,” noted Steve Gaenzler, SVP of Data and Analytics.

Business Wire Reports during the ten years between 2010 – 2019, the lightest month of national listing volume (December) averaged 1.3 million listed properties while the mid-point of the year (June) averaged 1.6 million listed properties.

During the last four months listing activity has increased. While the activity during June 2021 was just over 968,000 units, more than 500,000 fewer units than the June

Across the U.S., home prices rose 11.7 percent in the second quarter, a solid increase compared to the first-quarter increase of 9.4 percent.

Demand for homes does not appear to be subsiding. June 2021 recorded the second highest number of real estate closings ever at more than 370,000 closed sales. And homes continue to close in record time. Nationally, the number of days from listing to closing dropped to 69 days, the first time the measure has been below 70 days in recorded history.

Read the full article here.