January 2022 National Market Update with Main Line Realtor Kimmy Rolph, are you ready for some news?
American Home Equity has skyrocketed over the past year. But are we heading into a crash. What about inflation? What is going to happen to mortgage rates? There are so many reports with conflicting percentages of home price increases and inflation speculation, so I am happy to make some sense of these numbers. I know what you are thinking, we are due for a correction. One of the biggest questions on everyones mind is will we see more inventory in 2022? Bill McBride from Calculated Risk asserted that the reason prior to 2020 that inventory was so restricted was the properties were converted to rental properties or income driven and those who are aging in place were not selling.
And i quote,
In 2020, inventory really declined due to a combination of potential sellers keeping their properties off the market during a pandemic, and a pickup in buying due to record low mortgage rates and favorable demographics (a large cohort has moved into the peak home buying years), a move away from multi-family rentals, and strong second home buying. In 2021, mortgage rates remained low, demographics remained favorable, and we saw a significant increase in investor buying.
According to Altos Research, we were looking at a 21% decrease in inventory in 2021, making the competition between buyers really frustrating, but I think we will see more homes coming to the market, at a slowed pace of increase in price. Keep also in mind that the season you sell or buy, really makes a difference. In 2021, NAR showed inventory bottomed in January and Dececmber, however the local MLS data, and the Altos Research data, showed inventory bottomed even later than usual – in March or early April 2021. Say that 2022 follows the normal seasonal pattern, we will see inventory increasing by February (and maybe even in January).
But if inventory bottoms seasonally in December, we might see inventory increase later in 2022. Even still if inventory doesn’t bottom until March or April, we will probably see another crazy year for pricing.
This might sound like great news for sellers, and it is, but buyers, do not despair, I know of some new home opportunities coming to the market and some of my deals this year were private, so if you are looking to buy, there are definitely opportunities if you have the right agent.
With so little inventory, the impact on inflation, which is causing rents to rise, we are seeing the housing market booming. Sellers are getting the best possible prices and conditions, and buyers really need to buy to avoid rental fluctuations. If you are thinking about buying or selling on The Main Line, contact me directly.
Did you find January 2022 National Market Update with Main Line Realtor Kimmy Rolph useful? Follow our blog!
