Will Home Prices Continue to Rise…or Fall in 2022?

If you sold a house, bought a house or wanted to in 2021, the market was intense.

The average home price in the Conejo Valley, Moorpark and Simi Valley rose ~19% according to Zillow (20.4%) and Redfin(18.2%), and falls in line with CoreLogic/Case-Shiller’s estimate of 18.5% nationally.

Many indicators predicted that home price appreciation would slow dramatically by Fall of 2021. In fact, there was a slight dip in November, but the race is back on with early winter home buyers fueling the pace of double-digit price appreciation.

Despite the rapid increase last year, the rise in December shows there is no sign of falling off.

According to Selma Hepp, Deputy Chief Economist at CoreLogic,

“After some signs of slowing home price growth . . . monthly price growth re-accelerated again, indicating home buyers have not yet thrown in the towel.”

So, let’s talk about what that means to you as a buyer or as a seller.

The first quarter of 2022 saw an unprecedented number of buyers competing and driving values up.

If the buyers slow down or disappear, that would be great for other buyers hoping to see prices decline. But that is not on the horizon. Why?

The Feds announced several rate hikes this year to curb inflation, pushing buyers to act now while rates are low.

But due to the rapidly developing Ukrainian-Russian crisis, the Feds are reconsidering the planned multiple rate increases. This will create an even lengthier buying season as the threat of exceptionally higher rates is reduced. But the first rate hike is already planned for April, so the pressure is on causing the most eager buyers to start shopping this winter.

If you are a seller, this is a phenomenal time to sell. Sure, you could wait a little longer, but few sellers can intentionally time the market to sell at the peak. No one is that clairvoyant. That’s simply called luck.

But many sellers in the past who weren’t so lucky got caught in a declining market. That eroded the appreciation they made in a rising market and left them with less and took them longer to sell. 

OK, buyers, we know what you’re thinking! “I’ll just wait for the market to cool down.” So, here’s the deal.

Even if the Feds roll back several planned interest rate hikes this year, interest rates are still rising. And if you purchase at a lower price but pay a higher interest rate, your overall payment will be more.

Owning that home could cost you more every month than buying now with a lower interest rate.

Plus, while you are waiting, house prices are still rising, along with interest rates. Your affordability for that home is declining quickly.

And let’s talk about rent. If you are renting and waiting to buy, the current rental market is skyrocketing faster than the housing purchase market. And rental inventory is currently leaner than the number of homes for sale. It’s tougher to rent today than to buy.

Waiting to buy will dramatically and significantly impact your ability to purchase in the future.

Len Kiefer, Deputy Chief Economist at Freddie Mac advises:

“If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices – well, that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”

If you are considering whether to buy or sell a home, let’s talk! We’ll develop a strategy that works for you. If you are a buyer and you think this market is too hard to get your offer through, you haven’t seen us work!

Hear what Alex and Stephanie said about using us to help them compete in this hyper-buying market! 

We can do this for you too!