Spring 2022 Trends

Heading into 2022 had many expecting the market, which peaked at 20% in August 2021 to cool or decelerate. In December 2021, Zillow predicted that the market would decelerate 11% by the end of the 2022 year. However, as the market continued through January and February, Zillow revised their estimate to state that there will actually be a peak at 21.6% in May and a close to the year at 17.3%. So rather than decelerating, the market appears to be continuing to rise. What does all this mean for a buyer in this market? Well, if you are in the market right now, you have experienced first hand the stress of a declining supply- less inventory or homes on the market. This lack of inventory has created an environment of struggle to find listings in the right price point with meeting the right criteria. If buyers find a home they like, it often goes quickly off the market and many buyers are forced to increase bids if they hope to land the home.

If the prediction by Zillow is correct and the rate of home price growth does hit 21.6% in May, it would mark the highest since the 1980s. It would be the well above the peak 12-month price jump (14.4%) recorded prior to the 2008 housing crash. Not everyone in the industry agrees with Zillow. CoreLogic only foresees increases of 3.5% and FannieMae an acceleration of 7.6%. The variation of predictions directly relate to the fact that mortgage rates have been increasing. Whether the market accelerates 3.5% or 21.6%, everyone can agree that the market is not cooling and inventory will continue to be limited throughout early 2022. Following are some tips for buyers trying to buy in this market.
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1. Get Prequalified. Get your financials all completed so that you know your price point and if you see a house you like, you will be ready to move on an offer immediately.
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2. Select a Realtor to work as your Buyer’s Agent. They can be watching the New and Active listings and can notify you immediately when something is available. They may also know of things that are going to be coming on the market before they actually list, giving you an edge over other buyers.

3. Know your bid range. Be ready to flex on your offer price if the home you want has multiple offers.

4. Talk with your agent about other ways to make your offer competitive over other offers. If you are working with an experienced agent, they can navigate you through those options. These options would include playing with your earnest money and down payment amounts, playing with closing costs and closing date or even waiving some inspections to streamline the process for the seller. You would only want to do this if you felt comfortable doing so, but it could potentially push your offer above some others on the table. Discuss your options with your experienced Realtor.

5. Be flexible. In a seller’s market there will be a certain amount of flexing you will need to do when it comes to inspections and negotiations then you would otherwise have done in a buyer’s market.