The spring 2022 housing market will absolutely crush buyers — Zillow says home prices to spike 22%
February 17, 2022 3:20 AM MST
Heading into 2022, there was a wide consensus among real estate firms that the annual rate of home price growth—which peaked at 20% in August 2021—would steadily decelerate this year as some normalcy began to return to a housing market that had boomed during much of the pandemic. But now some experts aren't so sure.
Back in December, Zillow forecast that the 12-month rate of home price growth would decelerate to 11% by the end of the year. Then in January, Zillow revised that figure—saying that we would finish 2022 up 16.4%. On Wednesday, Zillow once again shifted its forecast upward: It now expects the year-over-year rate of home price growth to peak at 21.6% in May and to close the year at 17.3%. Simply put: Instead of decelerating, Zillow sees the 2022 spring housing market getting even hotter.
What's going on? Instead of inventory levels beginning to normalize this year, the situation is getting worse. In January 2021, the number of homes for sale was 26% below the level hit in January 2020. Last month we were 42% below January 2020. That lack of inventory means buyers will once again be forced to bid up prices if they hope to land a home.
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Speaking only for the Catalina Foothills single family home market the low inventory and high demand that began in the 2nd half of 2020 has not eased or improved at all this year. And I don't see any signs that it will improve anytime soon. With continuing low inventory, high demand and buyers who are not shying away from multiple offer situations I don't see how prices have anywhere to go but up. How far up I have no idea but the experts do. Take your pick, Zillow, Core Logic, Fannie Mae and others are predicting increases ranging from +3.5% to +22%.
And many headlines and talking heads are predicting that rising mortgage rates will dampen the market - maybe a tiny bit but, in this market in the Catalina Foothills, not much, not a sea change. For me the last sentence in the article nails the negligible effect of rising rates ; There are so many sidelined homebuyers that even if some are priced out by rates, there will be others waiting to replace them.
We'll soon see.
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Take care, stay well
John Schneider /Realtor®
Tierra Antigua Realty
johnschneiders@gmail.com
520 271-4164
see my website TheFoothillsToday.com
to find your Catalina Foothills Home
