Let’s find out if I was right about my predictions for this year’s market.
At the beginning of the year, I made some predictions about what would happen to the real estate market in 2022. Today I want to look back on those predictions to see whether I was right, wrong, or somewhere in the middle.
1. ❌ There will be more home sales in 2022. I was dead wrong on this one. For the first six months of the year, home sales only dropped by 1% compared to last year. However, we will see fewer home sales in the third and fourth quarters of 2022. Keep in mind that 2021 was a historic year for home sales, so don’t let fewer sales this year scare you.
2. ✅ Interest rates will rise. This prediction was correct, but there was no way for me to know that interest rates would almost double by this point in the year. Rates were around 3% at the end of 2021, but they’re now fluctuating between 5.75% and 6.25%. This has reduced affordability, which has shrunk the buyer pool.
3. ✅/❌ Inflation will rise, and more people will invest in hard assets. I was somewhat correct here. Inflation is around 9%, but more people didn’t invest in real estate. Rising interest rates caused fewer investors to buy and hold properties, though we are still seeing many cash offers.
4. ✅Foreclosures will not increase in 2022. I was on the money with this prediction. Unlike in the crash of 2008, today’s lending requirements are very strict, meaning that fewer people have had to resort to foreclosures. Plus, there are fewer homes on the market in general.
Now here’s my mid-year prediction: The end of 2022 will bring normalization to the market. Millennials ages 20 to 34 are the largest pool of potential homebuyers since the baby boomers, which is good for sellers. Though supply has fluctuated, it’s still low overall. These factors will bring people back into the market, causing things to even out a little.
If you have any questions about what’s happening in the market or what we can expect for the future, don’t hesitate to give me a call or send me an email. I’d love to hear from you.