What is to come for the 2022 Housing Market?
The snow and sleet are starting to appear around Huron & Perth County. The thoughts of snow-covered roads don’t intrigue me but I do love the season of winter as a whole.
Looking back onto the beginning of the 2021 year where we would typically see a sleepy season for selling and buying, quickly rolled into a fast momentum spring real estate market.
This summer of real estate was fast, competitive and if I’m going to share my personal thoughts was down right crazy. 16+ offers on houses with some homes selling for over $350,000 over asking (I personally witnessed) left me feeling down right sad for buyers in this market. Was it exciting for seller’s to take advantage of this market? Of course it was, and don’t get me wrong it was exciting on that spectrum. But we need to remember that if you’re a seller, your most likely turning into a buyer and also now dealing with the same problem. You sell big but you also have to buy big.
Single detached homes, which make up most of our market experienced the biggest price gains when comparing 2021 to 2020 data rising between 6.8-27.3% in some markets.
Inventory levels are extremely low and the imbalance of listing vs buyers are still driving the current seller’s market. As the market has definitely shifted from the spring/summer into fall. We are still seeing many properties sell for over asking, or offers not being negotiated unless they are close to asking or above the list price. Housing in the higher price ranges of $800,000 are starting to sit longer on the market compared to the spring/summer. Unless you’re looking along Lake Huron, then you can still expect to be competing against many buyers.
The new stress test implemented by the federal government for mortgages in June were placed in hope to cool the market.
While we can all watch trends and try to predict the future of real estate. Its hard to know in 12 months if prices will continue to climb or if higher interest rates in 2022 could cool the market.
From CREA (Canadian Real Estate Association) stats, they are predicting 2022 to see fewer MLS transactions than in 2021. It is still expected to mark the second-best year on record for Canadian home sales.
Limited supply and higher home prices are “expected” to tap the brakes on activity in 2022. But as I say to all my clients, none of us have a crystal ball to give any exact predictions. Many buyers have experienced “buyer burnout” and stepped back from the market hoping to see a dip or even pop of a “housing bubble”. As many more buyers are making moving choices associated with remote work through the pan*em*c, it is hard to predict until further down the road when we will have more certainty about what the future may look like.
Its always important to make informed decisions that you feel comfortable in. I always recommend talking to a good lender who can have a deep discussion of your financial position and also talk about where they see rates going. I know from person experience I felt very sure that our mortgage decisions were well thought out and that my lenders educated prediction of the market years ago were on point. Always try to give yourself a cushion and don’t make yourself house broke. That’s entirely new conversation I could talk about and maybe a good topic for the upcoming months.
If you ever have questions about the market, rates, or mortgages I am happy to discuss or for further information refer you to a 3rd party professional.
This article was create based on data collected from CREA and also my personal experiences in this market. Each specific market should be discussed with a relator in your area for best advice.