It’s almost showtime. April, May, June, July, and August are the busiest months in real estate. What should you expect from 2022’s fast approaching busy season?
Here are four likely trends for the 2022 real estate busy season:
- Homes will sell fast
- Mortgage rates will be a hot topic
- Tours will occur both in-person and virtually
- Home prices will keep rising
1. Homes Will Go Off the Market Quickly
If there’s one undebatable truth about the present housing market, it’s that there are fewer homes than would-be buyers. So, in 2022’s busy season, you should expect at least one constant: Homes will be going off the market quickly.
Home listings are presently at a record low. When buyers see a home they’re interested in, they are likely to act fast to secure the property.
What are the consequences of homes going off the market so quickly? For one, it means that busy season 2022 is likely to remain a seller’s market. Most sellers should be able to get their homes off the market fast, at or above their listing price.
Also, a tight, fast-moving housing market means that buyers in 2022 are going to be looking for a high-performing, well-regarded local agent. If the competition to buy a house is going to be fierce, then you should expect buyers to have strong expectations for the agent they hire to help them secure a home.
2. Buyers and Sellers Will Ask About Mortgage Rates
Mortgage rates were a major accelerant of the red-hot housing market of 2020 and 2021. Low mortgage rates incentivized people to borrow in order to buy homes, and ultimately contributed to high home prices and low home inventory.
But rates are rising, and you should expect your clients and leads to have questions about how mortgage rates stand to affect their home buying or selling journey.
In January 2021, a 30-year fixed mortgage rate was at 2.65%; in March 2022, the fixed rate topped 4% multiple times. In short, it’s becoming more expensive to borrow, and by extension, to buy a home.
That doesn’t necessarily mean that the housing market is going to cool or that people won’t be interested in buying homes. Some indications are that rising rates could, in the short term, actually push even more buyers into the market. If the Federal Reserve raises interest rates to curb inflation, then busy season 2022 may be the last time in the next few years that consumers can lock in relatively low borrowing rates.
Overall, you should expect buyers and sellers to ask about interest rates, and you should be able to give them intelligent, informed insight about how mortgage rates are and will affect their local market and buying or selling experience.
3. Tours Will Happen In-Person and Virtually
Not long ago, agents only conducted in-person property tours for prospective buyers. About two years ago, the outbreak of the COVID-19 pandemic put home tours on pause, and agents had to learn how to conduct virtual home showings exclusively.
This busy season, agents should expect to execute both in-person and virtual home tours.
Loosening CDC guidelines regarding COVID-19 are spurring business to bring employees back to the office, schools to drop mask requirements, and, possibly, home buyers and sellers to return en masse to in-person tours.
But not everyone will prefer to tour in-person. For one, some home buyers may have lingering concerns about COVID-19. Also, the price of gas continues to rise, and budget-conscious buyers may be wary of guzzling fuel by driving to different viewings.
Most importantly, buyers are at this point likely to expect some sort of virtual touring option when they inquire about your property. For example, out of state buyers have for two years been able to tour properties remotely – they aren’t going to want to lose that capability, and you want to give your clients the most competitive offer possible, whether the buyer comes to see the home in-person or not.
Being the best agent possible means having an option for virtual tours, so in 2022, expect to conduct home showings in-person and virtually.
4. Home Prices Will Continue to Rise
It’s the question that buyers, sellers, and agents have all been asking themselves: Are housing prices going to keep rising?
But that doesn’t mean that housing prices won’t continue to rise throughout 2022’s busy season. In January, we encouraged agents to track three indicators when gauging whether housing prices would continue to rise:
- Mortgage rates
- New home construction
As we’ve discussed, mortgage rates are rising but have not yet cooled the market. Higher inflation has persisted, raising the price of everything, including homes. And new home construction is up year-over-year, but is being constrained by the high cost of construction materials, which has resulted in an enduringly low supply of homes.
Taken together, the best bet is that demand will continue to outstrip supply, and that home prices will continue to rise throughout 2022’s real estate busy season.