After dramatic increases in the 2020 and 2021 markets, house prices nationally are expected to stabilize in the coming year, according to a recently released survey of housing experts.
Compiled by the National Association of Realtors, the 2022 Housing Market Hidden Gems report, which also included input from economists, sees a 5.7% increase in the annual median home price, with the hottest markets located in the South and West.
Those markets, according to Lawrence Yun, NAR chief economist, most likely underperformed in the last twelve months. “Several markets did reasonably well in 2021, but not as strong as the underlying fundamentals suggested,” he said.
“Therefore,” Yun continued, “in 2022 these ‘hidden gem’ markets have more room for growth.”
Such predictions, however, are guardedly given, barring any significant transmission of the omicron Covid-19 variant next year.
The report also notes other ongoing challenges for the industry: “Builders continues to face the economic fallout of the pandemic, delays in sourcing materials and parts, rising costs of raw materials, and difficulty hiring construction workers.”
NAR statistics confirm the wild ride that the nation’s real estate industry has undergone in the last 20 months. In February 2020, before the Covid-19 outbreak, monthly existing sales stood at around 5.3 million, only to fall to around 4 million by May.
As the nation reopened last fall, monthly sales shot up to a record nearly 6.5 million, and as of this past October were just a little bit south of that figure.
The median price range, meanwhile, has gone from just under $300,000 in early 2020, to around $353,000 earlier this year.
Altogether, Yun projected that the pace of home sales nationally will decline to 5.9 million in 2022, down from the 6 million seen in 2021.
By Garry Boulard