arhome realty blog

2022 housing market outlook

2021 was another extremely strong year in real estate. We saw one biggest booms in sales volume and prices in the last decade just keep getting stronger and stronger.

So what will 2022 hold? Are we headed for a crash, or will this keep going? Here's what experts are predicting.

prices

Despite the price bubble being the highest we've seen in over 10 years, most economist are predicting continued (albeit slower) increases that head towards stability. National Association or REALTORS chief economist Lawrence Yun says prices will rise another 5.7% above 2021’s already high numbers, with inflation alone accounting for a 4% increase. The rising prices will make housing affordability a continued issue, despite already being at "crisis levels" during the pandemic (says Todd M. Richardson, general deputy assistant secretary at the Department of Housing and Urban Development’s Office of Policy Development and Research).

Historical home prices for single family properties in the Chicagoland area since 2011. Source: Infosparks

number of sales

According to Yun, existing-home sales will decline to 5.9 million in 2022, and new constructions will increase modestly to 1.67 million, as the pandemic’s unreasonably low-inventory issue begins to normalize.

Historical number of homes for sale for single family properties in the Chicagoland area since 2011. Source: Infosparks

location

As the pandemic shifted many homebuyer interests out of the city and into the suburbs, it looks like this trend is likely to continue, according to Danielle Hale, Cheif Economist at Realtor.com. Hales predicts that while cities might remain pricier, suburbian affordability will no longer be the same as it originally was with its heightened desirability and overall rising prices.

bottom line

Overall, the market is predicted to be stable and positive, with less craziness and more of a healthy increase. But we know these are only predictions; we are still closely monitoring the progress as it unfolds.

Written by Joanna Sokolowski
Source: Realtor.com; National Association of REALTORS®; Infosparks