Over the last couple of months, the market has been on a hot streak. Despite having a busy start to the year, residential investors still don’t have a crystal ball about where the market is headed.
Will the market continue its hot streak for the rest of 2022? What should investors expect to see in the spring and summer housing markets and the second half of the year?
What To Expect Going Forward
At this time of the year, inventory is tight, and demand for homes is strong, meaning it’s a seller’s market. To identify the moves that are likely to influence the trajectory of the housing market in the coming weeks and months, we’ll need to watch the demand and supply signals currently shaping the housing market very closely.
Here’s how the 2022 residential property market will shape up:
1. Homebuyer Demand Will Grow Stronger
As a residential property investor, you’ll want to sell in a peak market where the demand and prices are high. The data suggests that homes on the market will move faster during the spring and summer, home buying seasons. Lesser days on the market means that the market will continue its hot streak, and buyers will outnumber the houses available to buy.
It’s always better to sell when everyone is keeping their eyes on your property. That’s why spring is always a competitive home buying season. Typically, demand exceeds supply during the spring and summer home buying seasons. This will favor any residential investors looking to sell because there will be a continued acceleration of property prices, more contingency waivers, and more buyers willing to pay way above the asking price to make their offers competitive.
2. Low Housing Inventory Will Create a Strong Seller’s Market
With inventory expected to remain tight, housing prices are not about to start cooling. As we approach the busy spring and summer home buying seasons, home values are likely to start and continue increasing. If you’re planning to buy or sell real estate in 2022, this information should help you make a more informed decision.
The spring and summer home buying seasons are going to be high-demand seasons. While it’s expected that inventory will pick up in the spring and summer, many buyers are expected to come in looking to buy property. This means that inventory will remain tight, making the 2022 housing market suitable for sellers.
If you’re looking to profit from the spring and summer housing markets, now is an excellent time to focus on preparing your home for sale. Make the repairs and upgrades that take longer to complete early so that you remain ahead of the curve.
3. Home Prices Will Stay High
High demand for homes and a continued shortage of housing inventory are likely to continue driving property prices high. Since real estate is an investment, the appreciation of residential property prices means investors will continue to receive attractive returns.
According to Realtor.com economists, we can expect home prices to grow at a rate of 2.9% for the rest of 2022. The leading indicators show that not so many more homes will go up for sale. Thus, buyers will be aggressive about what they’re willing to pay. We can anticipate the high property prices to endure due to the existing shortage of homes.
The ace in every residential property investor’s pocket is that predictions are saying that interest rates will begin rising towards the third quarter of 2022. The buyers will want to take advantage of the summer and fall markets before rates increase. This will cause the market to heat up during the second half of the year.
As we look towards the rest of 2022, indicators show tight inventory, high property prices, and strong buyer demand — a strong seller’s market. Thus, the housing market will continue its hot streak in 2022. As a residential property investor, now is a good time to remain invested and tighten the nuts in your investment goals.
Is there a residential property you’re considering selling or flipping, but you don’t have everything figured out just yet? We’re here to help. To learn more about how Center Street Lending can help you profit from the housing market, get in touch with us today.