An outside panel of economists and housing experts are undecided on whether sales will rise or fall in 2022, as concerns over worsening affordability continue to collide with expectations for rising inventories. When asked whether sales in Arizona are projected to rise or fall in 2022 compared to 2021, 41% of participants in the latest Zillow® Home Price Expectations Survey (ZHPES) said sales would grow, 41% predict a slowdown, and 18% believe sales will remain around the same.
From January 2021 to November 2021, 6.32 million homes sold nationwide, which is the most since 2006. Of those, an average of 5.61 million were existing homes. The forecast calls for sales of existing homes to increase a bit in 2022, drawing on recent sales performance, household formation rates, and the expectation that mortgage rates will remain relatively low (under 5%), offering attractive financing for homebuyers.
As a red-hot year in real estate has wrapped up, real estate experts are predicting prices will continue to increase in 2022- maybe not an eye-popping amount of 40% in most markets of Arizona, but we will more likely see Teen or 20% equity. Since the 30-year average is 6%)
In 2022, we might see less action from instant buyers, more commonly referred to as iBuyers. According to Zillow Research, homeowners in the Phoenix area sold almost $1.5 billion worth of homes to iBuyers last quarter, representing about 12% of all homes sold in the area. But one of the major players, Zillow Offers, is getting out of the iBuyer business, telling investors it is too risky and unpredictable—so the Zestiment is in effect worthless. (in Zillow’s own words)
City vs. Suburbs?
When it comes to whether to buy in Phoenix or whether to buy in the outlying areas or what’s going to trend higher, we think they will all rise pretty darn equally. But on the flip side, many workers have changed their commuting habits because of the COVID-19 pandemic. Some may not need to report to an office and seek extra square footage in the suburbs and outlying areas. So that is something worth watching.
People living in the colder regions of the country are thinking of a warmer place to retire, and Arizona has many benefits including, top medical professionals, year-round golf, lower taxes, and tons of stuff to do.
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