What’s going to happen in real estate in 2022? How do conditions compare to last year? Will the market go up, or are we in a housing bubble? Today I’ll talk about the 2022 Salt Lake housing market and the top five things you need to know moving forward:
1. Home prices are going to appreciate again. Last year, we experienced a 26.9% appreciation rate, which is the most growth that we’ve ever seen in a year’s time. This year, you’ll still see growth, but just not as much as in 2021. Truth be told, I’m actually thankful for that; the growth we saw in 2021 just wasn’t sustainable. You can expect around a 10% to 12% increase in 2022.
2. Interest rates will go up. Rates recently rose from around 3% to 3.5%, and the Fed has announced that they plan to raise interest rates throughout the year. However, keep in mind that rates naturally adjust over time and that they’re still historically low at the moment.
3. Expect listing shortages. Around 17,000 properties sold in 2021, and we anticipate roughly that same amount this year. The biggest challenge we face is that as prices go up, it becomes difficult for people to purchase. Back in 2015, the average income needed for someone to afford a home was $57,000. Now, with the 26.9% price increase, we’re looking at something closer to $101,000.
4. Home equity will increase, and buyers will face difficulties. With rising rates, low inventory, and price increases, do not wait to buy a home. If you buy now, you’ll be able to capitalize on the equity your home gains, which you can use for all sorts of things.
5. Transfer of wealth may happen earlier than anticipated. In the past, people would leave their additional cash, assets, or inheritance upon their passing. Nowadays, people are saying, “Why pass it on later when I can pass it on now?”
If you have any questions or need any help buying or selling a home, don’t hesitate to give us a call or send an email. We’re your market experts, and we can help you navigate the real estate process to get you what you need in the timeframe you want. We’re looking forward to a prosperous 2022!