Top Predictions for Main Line PA Real Estate 2022 will bring Less inventory, higher prices, higher mortgage rates, according to experts. BUY NOW SELL NOW has been the advice all year, but what about waiting until 2023? Are you having a hard time keeping track of the forecasts and making up your mind about buying or selling on The Main Line? You would be justified in your confusion, the market has been really unpredictable in 2021. I took some time to round up the top predictions for the 2022 real estate market from the latest forecasts.
There are some trends to pay attention to that affect you as a homeowner and a buyer.
First off, the incredible home price increases are expected to slow. We had anywhere from 16-19% increases in 2021, and we are looking at slows in 2022. Redfin Chief Economist Daryl Fairweather stated that
“If annual price appreciation falls to 3% [in 2022], it would only be the second time it will have fallen so low since the end of the housing crash in March 2012. This low price growth will likely discourage speculators from entering the market and allow more first-time buyers to have a chance at winning a home.”
Also, a forecast issued earlier this month from Fannie Mae predicted that prices would rise by about 7.8% in 2022 and Zillow predicted that home values in the U.S. would rise by 13.6% through September 2022. These vary pretty widely, but each of them are much slower than in 2021.
Next, the inventory that will be coming on market will be higher priced. So really quick to recap this for those new to real estate, there are two ways to increase the supply, which in The Main Line has been incredibly limited, and that is to add more new homes or for sellers to add their homes to the market. Builders have faced labor and materials shortages and since they can, they are adding homes that are more luxury than starter homes. On The Main Line, we do not have homes that are in a range that would be considered starter, however we also are seeing the homes added to the market being luxury. According to Ali Wolf, chief economist for the homebuilding research company Zonda:
“New home inventory should increase from 2021’s bottom, but we anticipate the market will remain undersupplied [in 2022]. Entry-level home supply in particular will remain extremely constrained. I can’t imagine we get to a point where we are flush with entry-level homes.”
Moving to the moving trends, real estate experts and I have been saying all year, that due to the rise in hybrid work models, and preference of buyers towards lower density, but higher amenity living, people are moving out of high priced cities to areas JUST LIKE THE MAIN LINE. According to Redfin’s real estate predictions for 2022: “cost-conscious homebuyers will seek out affordable northern cities like Columbus, OH, Harrisburg, PA and Indianapolis, which all happen to be capital cities with highly educated residents where the median home price is still less than $250,000.” Now, The Main Line buyer is not necessarily a cost-conscious buyer, but the luxury buyer is also looking beyond the city penthouse to a place with more space. Given The Main Line location and how well educated our population is and the strength of schools, we certainly count ourselves amongst the areas experiencing the most demand for homes.
Lastly, experts predict the increase of mortgage rates. The Mortgage Bankers Association released their predictions which include the following, rates could approach 4% by the end of 2022, also released the following, 30-year loan rates could hit 4% by the end of 2022, mortgage refinancing to drop off considerably, and an increase in purchase loans next year.
When I advise clients to buy AND sell right now, this is why. Your money goes further if you are borrowing and sellers are getting well above list price, with great terms.
If you are still confused by these predictions, I am so happy to walk you through your personal options, whether you are looking to downsize on The Main Line or are curious about what homes are available on The Main Line today, call me for more information.
Kimmy Rolph Sells The Main Line and local areas.
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