If you or anyone you know has been thinking of buying or selling a home, you are probably wondering what home prices will look like next year.
If prices are going to increase, buying now and waiting to sell makes sense. If prices are going to decrease, selling now and waiting to buy is more logical.
As I always say, buying or selling a home is best timed based on when YOU want to move, but it’s still a good idea to be aware of which direction prices are headed to help make the best decision.
So, let’s explore some different home price projections for 2022.
Every year, major housing industry entities release projections for the rise or fall of home prices in the following year. Rather than just looking at one projection, we will examine projections from various industry powerhouses including, Freddie Mac, Fannie Mae, and the Mortgage Bankers Association to get a broader view of what experts are predicting for next year.
All the industry entities I looked at projected continued price appreciation in the housing industry, though they differed slightly in their exact projections.
CoreLogic – 3.5% projected price increase
Fannie Mae– 5.1% projected price increase
Freddie Mac – 5.3% projected price increase
Mortgage Bankers Association– 8.4% projected price increase.
If we average these four projections together, we get a projected price appreciation of 5.58%. This is very close to the average projected price increase of 5.6% found by Reuters in a survey of 40 housing analysts. In other words, experts seem to agree that home prices will go up by around five and a half percent next year.
But what do these projections really mean?
It means houses will continue to appreciate at a healthy rate, but just not as hugely as they did over the past year, where we saw prices increase almost 15% here in Santa Cruz County!
At first glance, that might feel like the “market is falling” but 5.58% is still a significant amount when you think about pricing for homes in our area. According to the average projection of 5.58%, if a home is selling for $1.2 million today, that same home will be worth $1,266,960 at the end of next year. That’s a difference of almost $67,000 in just one year.
That’s a lot of money!
As a seller, these kinds of projections might make you wonder whether it’s worth holding off on selling your home to take advantage of the price appreciation next year. Of course, it’s not guaranteed that your specific home will be worth more a year from now. Many factors go into how much a buyer is willing to pay for a home, and future projections are never guaranteed. Even if the general market trend is higher prices like these forecasts suggest, you might still be able to get more for your house today than you would by waiting. I’d have to look at your home, where it’s located, who your most likely buyer is, and give you my best guess based on what’s happening in the market in your specific situation.
Regardless of what the projections say, the best time for you to sell your home is when you’re ready to do so. Ideally, we time it when it can get the most buyers possible, such as avoiding the holidays if you can, but even then, homes do sell, just not for as much as other times of the year.
The best thing to do is reach out to me and schedule a time to talk. I’ll walk you through what’s happening in the market now, and how to position your home properly for the best possible outcome based on your timing goals. We can talk about your life plans, personal financial situation, and more about how these projections may play out when it comes to your specific home.
As a buyer, projections of significant home price increases next year could make you feel like you need to buy now. Again, that might be the right choice for you. For one thing, these projections are just that, projections. Even experts cannot see into the future and guarantee what home prices will be. If only we had a crystal ball!
Projections are useful for getting an idea of what prices may look like next year, but they are not the only things you should consider when deciding when to buy a home. There are so many other factors to consider such as your financial situation, the time of year, and even what your life plans look like over the next few years.
As soon as you start thinking about buying or selling a home, feel free to reach out to me. It’s never too early to examine your situation and start coming up with a real estate purchasing plan that will work for you when the time is right. And don’t worry, I won’t push you to move forward with buying or selling before you say, “I’m ready!” All I want to do is get you educated, prepared, and start working on a strategy for success BEFORE you are ready to go, so when the time is right everything goes perfectly.
Email me at Jennet4RE@gmail.com when you want to talk more. Or schedule some time to talk here on my calendar. I’m looking forward to hearing from you!
I'm Jennet Kresge. I am a hospitality driven agent, meaning I focus on the whole experience for my clients from beginning to end. My goal is to take the overwhelm out of your buying or selling experience.
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