The pandemic has been no match for a hot housing market, as 2020 and 2021 saw double-digit increases for home values. What does 2022 have in store for buyers and sellers? Let’s take a look at what the experts are saying.
The latest edition of CoreLogic’s Home Price Insights Report takes the position that, while home prices may be plateauing, appreciation has yet to slow down. In fact, appreciation has consistently hovered around 18% for the last five months data is available.
The S&P Case-Shiller Price Index and the FHFA Price Index take a similar but different position, pointing to a slight deceleration from this time last year. In other words, appreciation has continued but is not at the previously predicted rate. Even with that deceleration, all 20 metro areas that make up the Case-Shiller index had appreciation of 10% or higher during that period.
The initial predictions of deceleration were based on the idea that housing inventory would increase throughout 2021 and catch up or surpass demand. However, buyer demand did not slow as expected toward the end of 2021, leading to the continuing double-digit appreciation we are seeing. Additionally, new construction slowed down as a result of supply-chain bottlenecks and a predicted surge of foreclosures never materialized after the mortgage forbearance program came to an end.
The bottom line on home prices as 2022 continues is that, while appreciation might start to slow, you should not expect the drop off to be quick. Supply and demand still points to the housing market remaining hot for the foreseeable future.
If you are considering dipping your toes into the market as a buyer or seller in the Madison area, you can turn to the proven real estate professionals at Gail Rutkowski & Associates to show you the way.