Happy New Year to you and yours! We are kicking off the new year with a serious demand for housing in the Northern Virginia real estate market. The weekend before Christmas, I wrote a contract for clients on a house in South Riding – it was the only house for sale in all South Riding at the time. In three days, there were over 150 showings and 34 contracts submitted. The house was only 2,500 square feet, had an unfinished basement, and was priced at $750,000 – crazy! The Monday after Christmas, I put a home on the market in Virginia Run. The sellers positioned the house in great condition to maximize their price. In the end, we decided to price it at $800,000. It was one of only two homes in all of Virginia Run for sale at that time. In two days, we had over 30 showings and multiple contracts resulting in a sale in which the buyers waived all contingencies, paid way over the list price, and offered settlement in just two weeks.
I believe we are entering yet another frenzied market as we head into 2022. On New Year’s Eve, I ran the numbers for our market once again, and we are now at another all-time low for inventory of resale homes in Northern Virginia. In the counties of Fairfax, Arlington, Alexandria, Loudoun, Prince William, and Fauquier, there are only 1,119 properties for sale. People say, “oh, it is just that time of year; inventory is always low now.” Looking back over the last five years, we have averaged 2,901 houses for sale this week – a huge difference, especially with all of the demand. I believe we will be in for quite a ride in real estate in 2022.
Here are my predictions for 2022 in real estate:
· Inventory will remain low – if you have nothing to buy, you won’t sell, so inventory will stay low
· Homeowners will continue to renovate/remodel as a result of low inventory
· Demand will remain strong – 45 million Millennials between the ages of 26 and 35, which are prime home-buying years
· New home sales will be flat as construction costs, and labor constraints will hold sales down
· Prices will increase once again – it was 9.5% in 2021; I think we will be in the 6% range in 2022
· Interest rates will increase but only slightly – 3.11% at year-end 2021; I think they will go to 3.75%, which is still below pre-pandemic levels
· iBuyers will continue to increase their market share in all areas of the country
· Inflation will remain high…I think in the 6-7% range in 2022 – hopefully no higher
· Demand for rentals will remain strong, and prices for rentals will continue to rise
· Covid will continue to be an issue as well as a threat and continue to impact supply chain, which will impact the overall US economy. This, in turn, will influence people’s home buying and selling decisions.
So, there you have it – let’s check back in January of 2023 to see how I did on my predictions.
Happy New Year!