Looking ahead to 2022
WHAT’S AHEAD IN 2022?
In 2021 we had record low mortgage rates, low supply, and an increase in home buying from investors fueling double digit price increases. Here’s a look back at 2021 and recap of data and 2022 predictions from the sources that I follow.
Corelogic December 13, 2021: According to the S&P CoreLogic Case-Shiller Home Price Index (HPI), annual U.S. appreciation rates from April to September have been at their highest since the inception of the index. The October 2021 Corelogic Home Price Increase (HPI) was 18% vs. 7.4% in 2020, the highest in its 45 year history.
Reuter’s December 6, 2021 - “Rise in U.S. house prices to halve next year, affordability to worsen.” The rise in U.S. house prices will slow to half its double-digit rate next year but still outstrip increases in consumer prices and wages.
Inman In a recent real estate agent poll, Inman reported earlier this month the following predictions:
Inventory will remain tight. Only people with strongest motivations will sell because of how hard it is to buy.
Prices will continue to appreciate but at a lesser rate.
Interest rates will rise to 4% by the end of the year.
How will all of this play out in Southern California? Overall, there’s consensus in the 2022 predictions. The outlook for the 2022 Southern California real estate is that the market is still hot, but cooling. Factors such as rising interest rates, increased supply and cooling demand due to 2021 record setting price increases, point to a continuation of a seller’s market, but less so than the 2021 market.
