http://katiemooreteam.com/blog/categoryname_housing-2022/sort_entrydatetime-desc/ Zillow's Hot Housing Takes for 2022By Zillow Research on Dec. 8, 2021The housing market may not reach the incredible heights of 2021, but we expect it will be anything but slow next year. Expect the strong sellers market to persist, the Sun Belt to maintain its top spot as the most in-demand region, and flexible work options to continue to shape housing decisions in new ways in 2022. The following are Zillow’s bold housing predictions for 2022. Whatever happens, the Zillow Economic Research team wishes you and yours a safe, healthy, prosperous and enjoyable year!2022 will fall just short of record-breaking2021 marked the hottest housing market in U.S. history by some measures, including Zillow’s Home Value Index. While we may not see those records broken in 2022, Zillow economists expect incredibly strong price growth and sales volume to continue. Zillow’s forecast calls for 11% home value growth in 2022. That’s down from a projected 19.5% in 2021, a record year-end pace of home value appreciation, but would rank among the strongest years Zillow has tracked. Existing home sales are predicted to total 6.35 million, compared to an estimated 6.12 million this year. That would be the highest number of home sales in any year since 2006. Sellers keep the upper handThe usual seasonal cooldown in the housing market is reappearing this fall after a hiatus in 2020. Fewer homes are selling above list price, homes are staying on the market a few days longer than they did during the summer, and more sellers are cutting their price. Zillow economists expect these metrics to trend slightly cooler in 2022, but don’t mistake that for a buyers market. The market forces that have given sellers the upper hand over the past two years or so — tight supply after years of underbuilding, and elevated demand due to remote work, U.S. demographics and low mortgage rates — will persist next year as well. Expect to see bidding wars on many homes, especially as the market heats up during the spring and summer shopping season. Large rentals will be in high demandRising home values will impact the rental market as well. After a slowdown in the early months of the pandemic, rent prices came roaring back, especially in what were previously some of the most affordable markets. As rising costs make it harder to save for a down payment, expect demand for larger rentals to increase, including for single-family homes, as families stay in the rental market longer. The ‘Sun Belt surge’ will extend to secondary markets2021 was in many ways the year of the Sun Belt. Zillow predicted Austin would be the hottest market of 2021 as part of a “Sun Belt surge,” which proved to be the case — no metro has seen home values grow more than Austin so far this year, and all of the top destinations for long-distance movers were in the Sun Belt.  Zillow predicts this surge will extend to smaller Sun Belt cities in 2022 as price hikes in this year’s star markets make more-affordable nearby markets more attractive. From April to August, Austin held the top spot in quarter-over-quarter home value growth, which is a good indicator of current housing demand. As of October, the smaller Florida metros of Fort Myers and Sarasota held the top spots, and 24 of the top 25 markets were in sunny states – a sign of things to come in 2022. More Gen Zers and millennials will buy a ‘second home’ before a primary residenceAmericans are taking advantage of remote work flexibility to move to larger homes in more-affordable markets, but many will not want to commit to a new location full-time. This is often true for younger people who are attracted to the amenities of living in a city, where expensive housing is more likely to put homeownership out of reach.  With these factors in play,  there may be more people buying what’s traditionally a second home — either a part-time vacation home or an investment property — before they buy a home as a primary residence. Young people today are savvy watchers of the housing market, in part because of time spent Zillow surfing. Purchasing a “second” home in a market more affordable than the one they live in is a way to break into the market and start building equity while mortgage rates are low, possibly teaming up with friends or family to lessen the financial burden. Virtual home shopping tools available today, such as Zillow 3D Home tours, make buying a home in a far-flung location easier. No end in sight for the renovation boomIn the race to buy a home in the ultracompetitive pandemic housing market, many buyers have had to make one or more compromises (81%). As prices and mortgage rates rise, expect many homeowners to upgrade their existing home rather than try to wade back into the market to trade up. A Zillow survey of homeowners found nearly three-quarters would consider at least one home improvement project in the next year. The top projects on their to-do list are renovating a bathroom (52%) or kitchen (46%), adding or improving a home office space (31%), finishing a basement or attic (23%), adding a room (23%) or adding a separate dwelling unit (21%). Work will play a key role in moving decisionsThe rise of flexible work options has changed how heavily a short commute factors into where Americans live. Home buyers used to pay handsomely to live near downtown and reap the benefits of a quick trip to and from the workplace each day, but that dynamic flipped in much of the country last year as buyers prioritized affordability and extra space. In 2022, hybrid and fully remote work will continue to reshape which areas are most in demand as the pandemic winds down and more workers receive permanent guidance on their flexible work options. Zillow economists expect fully remote workers to continue to seek affordable markets, like those in the Sun Belt and other nontraditional housing hot spots where they can afford to buy their first home or trade up for a bigger one. And amid the “Great Resignation” and a generally aging population, traditional retirement markets are likely to see elevated demand.New construction gains will only be a drop in the bucket, despite best efforts of buildersThe reason home prices are rising so quickly is economics 101: high demand and low supply. Zillow research shows that in the 35 largest housing markets alone, there has been a shortfall of 1.35 million new homes since 2008 because of a construction slowdown following the housing crash. Home builder confidence is sky-high, and builders are doing all they can to get houses up, but supply chain snags and labor shortages are limiting progress. The gap shrunk in 2021 and will likely shrink again in 2022, but the housing shortage will be a defining feature of the market once again next year.  http://katiemooreteam.com/blog/3810/zillow's-hot-housing-takes-for-2022/ Sun, 23 Jan 2022 08:08:59 -0500 The US housing market has had a white hot year. Home sales are on track to reach the highest level in 15 years, with an estimated 6 million homes sold in 2021.But whether you benefited from this surge depended a lot on if you were selling a home or buying one.Homeowners saw average home prices skyrocket nearly 20% through the third quarter compared to a year ago, according to the Federal Housing Finance Agency. It was the largest annual home price increase in the history of the agency's House Price Index. And, in some hot markets, the price increase was double that.America's 10 most expensive zip codes have median home prices over $4 millionHomes also sold at a record pace, with sellers often fielding multiple competing bids and all-cash offers. Even homes that were disgusting or burned out sold quickly, and at amounts that were well over the asking price. For buyers, it was a different story. While mortgage rates kicked off the year at record lows, it was difficult to even find a home to buy. Inventory of available homes reached an all-time low early in the year and competition was extremely stiff.Many prospective buyers left the market dejected and without a home to call their own. As a result, demand for rentals surged and rents went up across the country.Enter your email to subscribe to the CNN Business Newsletter.close dialogBEFORE MARKETS OPENSTART YOUR DAY SMARTGet essential news and analysis on global markets with CNN Business’ daily newsletter.Sign Me UpNo ThanksBy subscribing you agree to ourprivacy policy."It was an insane year," said Matt Holm, an agent with Compass in Austin. Last January, he put a smaller five-year-old home on the market at $425,000, higher than comparable sale prices, and was flooded with offers. "I stopped counting at 35 offers," he said. The home sold for $545,000, a 30% increase over the list price.Another buyer, who bought a lakefront luxury home for $6 million in 2020, was offered $9 million a few months later and $11 million two months after that by buyers desperate for a lakefront property, Holm said."My sellers said, that's a lot of money," Holm said. "They wanted to sell and get something as good or better. But they realized they shouldn't sell because to get something a little bit nicer than what they had was going to cost $18 to $20 million. That is a remarkable jump for a calendar year."Without a doubt, the housing market was on a wild ride in 2021. Here's what to expect as we head into the new year.No more record low mortgage ratesThe year began with the lowest interest rates on record, with average rates for a 30-year fixed rate mortgage at 2.65%. But they didn't last long. By April 1, that had reached a 2021 peak of 3.18%. Rates have fluctuated since, with the 30-year fixed at 3.05% last week, according to Freddie Mac. And we can expect rates to move even higher in the new year.How much house can I afford?The Federal Reserve has given several signals that its pandemic monetary policy will come to an end as it works to curb inflation. Ultimately, that will push interest rates higher.The Fed's revised policy won't put a dent in the pockets of people looking to purchase a home within the next few months, but they might want to act soon, said Melissa Cohn, the regional vice president and executive mortgage banker of William Raveis Mortgage."Mortgage rates should remain range bound around 3% through the end of the year and hopefully through the first two months of 2022," said Cohn, who anticipates rates to increase by up to a half a percentage point over the next couple of months.Similarly, Lawrence Yun, chief economist at the National Association of Realtors, expects the 30-year fixed mortgage rate to increase to 3.7% by the end of next year, but noted this will still be lower than the pre-pandemic rate of around 4%."Increased mortgage rates, coupled with inflation eating away at savings, will take a toll on buyers," said Allison Salzer, a Compass agent in San Francisco. "It will affect the lower-priced and median-priced home purchasers more than the luxury buyers."Inventory will remain tightEven though more properties became available as the spring home buying season heated up this year, there were also more people looking to buy, creating fierce competition and pushing prices skyward.There were so few homes, people were taking extreme measures like offering to buy the seller's next home for them, giving thousands of dollars to competing buyers to walk away and paying as much as $1 million over the home's asking price. One home in Maryland received 7 all-cash offers.Inventory was tightest at the lower end of the market. Homes priced under $200,000 have been hard to come by, with the number of available properties falling 19% this year compared to last year, while there was a 40% annual increase for homes above $600,000, according to HouseCanary, a real estate data company.While the inventory picture is expected to improve in 2022, it isn't expected to perk up by much. Inventory will remain limited and grow by only 0.3% in 2022, according to a Realtor.com forecast."The greatest factor I see affecting the 2022 housing market is the low inventory," said Paulo Prietto, a Compass agent in Orange County, California. "While inventory remains low, buyers will become more accustomed to the lack of choices and will continue to aggressively compete to purchase homes."As long as that happens, prices will continue to go up.Home prices will keep risingHome prices rose nearly everywhere in the country in 2021.While existing home sales reached a median price of $353,900 by November, up 13.9% from a year ago, new construction home prices were even higher. New construction homes hit a median price of $416,900 in November, according to the US Census Bureau, about 19% higher than a year ago, and another new record.While we won't see the double-digit gains that were made in the past year, prices are expected to keep rising in 2022 at a slightly more moderate pace.A group of 20 top economic and housing experts brought together by the National Association of Realtors projected that median home prices will increase by 5.7% next year. The NAR survey participants said they expect the housing market and broader economy to normalize next year as the Fed tries to tame inflation."Slowing price growth will partly be the consequence of interest rate hikes by the Federal Reserve," Yun said.First-time buyers will continue to face challengesThe prevalence of all-cash offers, few available homes and skyrocketing prices pushed many first-time buyers out of the market in 2021.By the end of November the share of first-time buyers had fallen to 26% from 32% a year before, the lowest level since the National Association of Realtors began tracking in 2008."We are creating a divided society," said Yun. "People don't feel like they are participating in what they consider to be American life through homeownership. All their work to build up savings can feel less meaningful in the face of rising prices."Soaring home prices pushed the share of first-time buyers to historic lowsNot only were prices rising faster than people could save for a down payment, many mortgage types favored by new homebuyers, like FHA and VA loans, were often passed over for all-cash deals or conventional loans.The inventory of homes at the lower end of the price range was so tight that the number of sales priced between $100,000 and $250,000 were down by nearly 20% in November, according to NAR.And while new construction homes are now starting to come on line, most are priced outside of the typical first-time homebuyer's budget."Builders are focusing more on high-priced houses, with the percent sold for under $300,000 falling to just 14% from 33% a year ago," said Robert Frick, corporate economist at Navy Federal Credit Union.But many hopeful homebuyers are saying they will be back in the spring, armed with the knowledge they gained from a frustrated search this past year, according to a recent survey from Realtor.com"Despite a challenging year, aspiring first-time homebuyers are surprisingly optimistic about 2022," said George Ratiu, Realtor.com's manager of economic research. "They're looking at the new year as a fresh opportunity to make their dreams of owning a home come true."Inman http://katiemooreteam.com/blog/3799/the-housing-market-was-on-a-wild-ride-this-year-here's-what-to-expect-in-2022/ Tue, 28 Dec 2021 08:22:55 -0500