FEBRUARY 2022
@HOME N E W S L E T T E R
ISSUE 124
NAVIGATING THE 2022 MARKET
BY KELSEY FULTON
W
elcome to 2022! The market is moving quickly, and there is a lot to review as we head into the spring season. 2021 was filled with fervent buyer demand driven by the pandemic and by a hunger for the quality of life we experience in the inland northwest. In both Spokane and Kootenai county, prices continued to rise, while the number of days on market fell drastically. But what does this mean for
increasing interest interest rates three or four times in 2022, which will certainly make it more difficult for some people to afford the home they want. Spokane and Coeur d’Alene appear on lists of the top 10 markets and best places to live, which we expect will keep the level of demand high. Prices throughout the country are projected to rise by 5% over the next 12 months. Locally, we are projecting a 12%-20% increase, depending on desirability of one’s location.
the coming year and what does a buyer or seller in our market have to look forward to? We would like
Q: Where are interest rates headed? How does that
to A this Q and also let you know what your agent can do to help guide you through this process. Q: Are we in a speculative bubble that is going to burst? A: While this market may feel similar to that of 2008-2009, current lending guidelines are designed to make sure that people who are purchasing homes are not encouraged to borrow more than they can afford. Moreover, because of the competitive nature of the market, most buyers are financially strong, and well-qualified. Q: What will happen with pricing in 2022? A: In Spokane, we saw the average sale price increase by 24.7% in 2021. In Northern Idaho, it increased by 34.2%, while nationwide, prices rose 15.8%. In 2022, we expect to see prices continue to increase, due to continued low supply and high demand. However, with the Fed
affect me? A: It is impossible to predict where the interest rate will be one year from now. Many authorities estimate that, after several increases, rates will be increased several times, and will likely reach 4-4.5% by year’s end. As a result, lenders will be doing less refinancing this year, while maintaining or increasing the number of new mortgages they issue. Q: Should I wait to sell my house? A: There are many factors that go into answering this question which require weighing and balancing by your real estate agent. Some questions to answer are: • Why are you thinking about selling? • Do the benefits of waiting outweigh your wish to be closer to family or friends? • How will waiting impact your health?
• Will waiting mean having to do without the space you need? These questions, paired with the information about rising prices and interest rates might mean that it will cost you more both in down payment and monthly payment if you wait. If your plan is to move into a larger, more expensive home, it may be to your advantage to act sooner than later. Q: Should I buy now or wait for prices to decrease? A: Again, there are many factors that go into answering this, and it is important to review them with your agent and a lender. The reality is that we are very likely not going to see prices decline for some time. Waiting to act may change what you can afford. Q: What should I be asking my agent? A: Your agent is here to support you through your homeownership journey. Realtors are true professionals who are actively involved in and studying the market every day. Use them as your resource for determining what your home is worth, what lenders might best suit your needs, and what home improvements are worth investing in. If you have an opportunity to own your own home, it is one of the best investments you can make. Your agent will be able to give you great advice in navigating this difficult market, and arriving successfully at the goal of home ownership.