Buyers are rushing to secure low mortgage interest rates before the Federal Reserve announces its first interest rate hike in March.
Home Buyer Demand in 2022?
Home buyer demand will continue to overwhelm housing supplies. Already, the “Spring Buying Season” has kicked off.
The imbalance of supply and demand translates into continuing high prices.
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Know that rates are already climbing…meanwhile, The Fed said in December and again in early January that it’ll gradually raise interest rates three times this year beginning in March.
Younger and Remote Workers Buying in Smaller & More Affordable Areas
Homes in smaller and more affordable towns, suburbs and more rural areas have been hot with younger and remote working buyers for a while now. Jeff Tucker, Senior Economist with Zillow, sees these preferences continuing this new year.
Tucker said, “…the best predictor of upcoming price appreciation is the most recent few months of price appreciation.” Using a model combining historic price levels, current market values and housing supply, Zillow forecasts that year-over-year home price growth will continue through May 2022.
Zillow Forecasts These 12 Markets for Highest Home Price Growth by May 2022
You’ll see the key factors young and remote worker homebuyers are looking for in a place to live – jobs; relative affordability; tax-friendliness; available housing and/or land; other Millennials and young families; four-season weather; amenities such as restaurants/bars; outdoor possibilities; and airport proximity.
Know there will be competition to buy from investors who often are cash buyers so make sure your clients are “ready to go” in terms of having enough saved for a down payment and are pre-approved for a mortgage. Sellers like “sure-thing” deals.
- Austin TX – +37.1% price growth forecast by May 2022
- Jobs, jobs, jobs; tech growth, individual & institutional investors; available land to build in outskirts
- No state income tax
- Fort Myers, FL – +28.2% price growth forecast by May 2022
- Relative affordability; sufficient new builds available.
- Favorable state tax structure
- Provo UT – +28.2% price growth forecast by May 2022
- Millennials are largest demographic plus Provo has highest birth rate in country
- Average house goes from list to contract in average of six days due to booming tech industry and in-migration from Washington and California
- Phoenix AZ – +26.2% price growth forecast by May 2022
- Buyer demand through the roof, offers from +10% – +30% over list price
- Home builders increasing their production & prices with bidding wars on lots
- Ogden UT – +25.2% price growth forecast by May 2022
- Major inventory problem continuing
- More space available
- San Diego CA – +24.7% price growth forecast by May 2022
- High prices considered to be “weather tax” for 330 days of sunshine
- Demand “extremely strong” with inventory being absorbed faster than it becomes available
- San Jose CA – +24.5% price growth forecast by May 2022
- “High tech capital of the world” filled with “crazy rich techies” living in perfect weather conditions
- Proximity to Santa Cruz, Carmel, Monterey, Napa, San Francisco and. Sausalito
- Cash buyers make up +20% of market (1 in every 797 people worth more than $30M)
- Spokane WA – +24.2% price growth forecast by May 2022
- Total imbalance of supply and demand
- Lakes, mountains, international airport for easy travel to Seattle/Boise with great amenities
- Salt Lake City UT – +23.5% price growth forecast by May 2022
- No break in demand with home prices and rents escalating
- Jobs, tech growth, Millennial buyers and out-of-state in-migration
- Boise ID – +23.3% price growth forecast by May 2022
- No supply with 35% cash buyers
- Tech commuters to Silicon Valley, finance people commute to LA and aerospace and biotech people commute to San Diego; lots of California retirees; relatively affordable
- Las Vegas NV – +23.2% price growth forecast by May 2022
- Relative lower cost of living; no state income tax
- First-time buyers, in-migration from other states currently make buying and renting an issue
- Riverside Ca – +21.8% price growth forecast by May 2022
- Benchmark city of Inland Empire and relatively affordable compared to rest of Southern California
- Supply and demand imbalance persists
- Mecca for remote workers
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Thanks to Zillow.