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2022 Real Estate Market Predictions | Dallas Housing Market

Bret Chance

Integrity, hard work, do the right thing, problem-solving, professionalism, driven, teacher. Those are words that describe Bret Chance...

Integrity, hard work, do the right thing, problem-solving, professionalism, driven, teacher. Those are words that describe Bret Chance...

Jan 20 4 minutes read

Will home prices continue to rise in 2022? 

Will there be more homes for sale in the Dallas area?

What about mortgage interest rates? Will they go up or down?

We're making some BOLD predictions about the 2022 real estate market!

Check out our 5-minute video below. ⬇️

(Or you can read all about it below our video.)

In case you're wondering where we get our information, it's a compilation of data from NAR Chief Economist Dr. Lawrence Yun, Brian Buffini with Buffini and Company (the largest real estate training and coaching company in North America), and from other legitimate sources - and of course, what I'm actually seeing and experiencing in the local Dallas housing market.

Let's Dive in:

Home sales or the number of homes selling may be down 2% in 2022 because of higher interest rates. Now, we will still have a healthy real estate market, but not a runaway market (i.e.crazy home prices) like we have been seeing. Real estate market is based on supply and demand - the number of homes vs. the number of home buyers.  So with a low number of homes for sale, and still having a lot of out-of-town buyers moving to the Dallas area, our market will remain strong. Going from a super heated market, to a heated market.  The speed of the market will stay. So, if you find a home you really like, there will still be no time to contemplate and think about it. You'll have to be ready to act quickly. Have your ducks in a row - get pre-approved for a loan ahead of time, know what kind of pricing you're comfortable with, etc.

We will see more inventory or homes for sale.  The home builders will be building more homes and starting to catch up after a decade of under production (since the recession in 2008-2009). More homes are expected for Spring of 2022 than Spring of 2021. The key to all of this is supply of building materials. 

Some people are wondering how the loan forbearance program will affect the market?  Will there be a flood of foreclosures hitting the market causing the values to crash?  There is good news about all of this. The loan forbearance is winding down and these homeowners will likely be selling their homes. Since home prices have gone up, they have money in their home so they can sell it without being in distress. So I do not see a foreclosure issue. 

Mortgage interest rates will rise because of inflation. They will creep up over the year from around 3% up to around 3.75%. According to the experts, we’ll likely see the rates change in quarter 3 and 4 of 2022.  I know we all have gotten used to having super low interest rates which has been very nice.  Just to keep it in perspective, since they have been keeping track of the interest rates in the US, the average interest rate is 8% over time.  In the 1980’s people were paying 12-18% interest rates. 

How does the interest rate affect you and me? Looking at buying a home, when the interest rate jumps up 1% it will cost you 10% in what you can buy.  Meaning, if you are looking at buying a $500,000 home and you want a certain payment and the interest rate jumps up 1%, to keep that same payment you will be looking at a $450,000 home now. So it just cost you $50,000. You can see how waiting to buy may cost you.

Home sellers will see less over priced offers, meaning they may get full asking price but not way over as long as the price of the home is set correctly up front. Of course, this will still likely depend on the type of property, location, and price point.

The high end real estate market, or luxury market will be the last to be affected. The people in this market will be taking out money from the stock market and buying real estate to hedge against inflation.  Regardless what market you are in, if you have money in the stock market you could consider do the same to protect yourself.  

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