Expert Predictions for the 2022 Housing Market–and What They Mean for Buyers

Since we know the 2022 real estate market is expected to be another busy one, what does this mean for potential buyers?

This year looks a lot like 2021 2.0...and we expect prices in the Gig Harbor market to escalate double digits. It’s interesting to note that inventory in Pierce County, WA, was actually higher in 2021 than the last four years, but even though we had the homes to sell, the buyer demand far outpaced the inventory that came on the market. Since we already saw record showing numbers in January, we don't see that slowing any time soon.

1. What does this mean for those who have been saving for a home but keep getting priced out?  

First of all, you have to be working with a local agent to help you navigate the market that you are shopping in. You must also be underwritten by a local lender, not just pre-approved. In a stack of other financed buyers, fully underwritten buyers will be the best buyers. Know your buying power and what “reserves” you have on hand—gift funds, retirement loans, savings, etc.

Have your bank statements ready so you can show proof of funds, even if it’s just for your down payment. You want to be able to provide anything that will make the seller feel more comfortable with accepting your offer over another one in a stack of similar offers. 

Shop 2-4% below your top-end budget so that you can ride the price escalations up. 

Know your choices for negotiating within the contract. There are a ton of options you can use to strengthen the terms of your contract, so hire an agent who knows how to write amazing terms, not just offer the highest price. 

Are there any off-market options you can consider? Another benefit to hiring a local agent is their ability to source these options for you.

Finally, keep the faith. Even with the best agents by their side, average buyers are writing at least four offers before they win. It might seem like your offer will never be accepted, but don’t give up! 

2. If inventory is low, should buyers pause their search because of bidding wars, higher prices, etc.?

If you are someone with low risk tolerance, this might not be the market for you. Many buyers are waiving contingencies in order to win, but some buyers do not want to do that. If you are in this category, then I would suggest pausing the search because of risk aversion. 

However, if you want to take advantage of the low interest rates in an appreciating market, hang in there. This market is tough, but inventory is coming. Make sure you have a local team of agents to hit the ground running when that hot home hits.

3. Should remote workers consider relocating for home ownership?

If they don’t like where they live, then yes, this is always an option. They could sell in a HOT market and move in a less crazy market, or even if they move in a market that’s just as crazy they could possibly get more for their money. 

And there you have it! It’s a crazy market out there, but as I said, hiring a local agent who knows how to navigate it is your first step to success in finding your perfect home.