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The real estate market looking ahead

submitted by Lynne Kelleher, Berkshire Hathaway Home Services/Fox Roach Realtors Newtown Office

Even though my crystal ball is in the shop, and has been for years, there are some pretty clear indications from those in the know about what we can expect for real estate in 2022…

While the frenetic pace of the market will settle down a bit, prices should remain at their elevated levels and continue to grow at a more normal rate. That means that while what Realtor.com economists estimate will be a 12% growth in prices for 2021 will taper to a more normal 3%, it will be on top of recent high prices. And that translates to new price highs.

Unfortunately for buyers, no one is anticipating a plethora of new properties to hit the market and inventory levels will continue to be tight. This is partially due to a continued lack of new housing starts, which have been exacerbated by labor shortages and supply chain issues.

There are more buyers than there are properties to buy, as a mass of millennials 45 million strong hit their peak home-buying years, so attractively priced properties in good condition will continue to be in high demand.

Interest rates are not immune to the inflation felt elsewhere in the economy and will rise in 2022, helping to curb the runaway price growth seen last year.

Realtor.com anticipates mortgage rates will rise to an average 3.3%, hitting around 3.6% by the end of 2022. That’s up from a low of 2.65% in the first week of January for 30-year fixed-rate loans, according to Freddie Mac data.

All in all, it will be another tricky year in real estate. And it is not one to traverse alone, or with an agent who just got licensed because “they love looking at houses!!!” or “want flexible hours!!!”.

If you are interested in exploring how to make this market work for you, let’s talk. I can be reached at Lynne@LynneKelleher.com or 215-813-6655. I’d love to meet you!

PHOTO CAP: Lynne Kelleher

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