Let’s look back at 2020 and 2021 to gauge where 2022 is headed.
It’s 2022, and everyone’s biggest question is, “What’s the market going to do?” I’ll tell you right now: I don’t know, but I have some inclinations of what may happen. For one, I don’t think this market will crash. We might see a little bit of a slowdown, but even that is unlikely. To get a better picture of what might happen this year, let’s look back at 2020 and 2021.
Some of you may not know, but 2020 was the best year ever for Dallas/Fort Worth real estate. It felt really weird when we got shut down in Q2, but in the third and fourth quarters, we came back hard.
119,000 homes were sold in 2020. The average sales price was $351,000, which added up to about $39.5 billion in real estate sales volume.
We don’t have all of the 2021 numbers yet, but through November, we sold 107,000 homes. That means even if it doesn’t beat 2020, 2021 is already the second-best year in DFW real estate. We’ve had $43.2 billion in total sales so far, and the average sales price was a whopping $419,000, which is almost a $60,000 increase.
“If anything slows down the 2022 market, it will be our low inventory. ”
Where does that put us for 2022? Well, we know that interest rates will rise for sure. They’re already going up, and we expect two to four more increases throughout the year. Each increase should only be between 0.25% and 0.125%, so we should have a 3.75% rate by the end of the year. I don’t think we’ll hit 4%.
This will slow down pricing a bit. As rates go up, affordability goes down. We still think pricing will increase, but it won’t increase as much. This definitely doesn’t mean the market is crashing; we just won’t see last year’s incredible increase.
The biggest challenge for our market in 2022 is inventory. We have more than enough buyers looking for homes; we just don’t have homes to sell. We are still getting 10 to 30 offers per listing, and you’d be surprised what buyers are doing to win homes. If anything slows down the 2022 market, it will be our low inventory.
There are a couple of things happening to counteract this. Some people are getting wind of this shortage and listing their homes. New home starts are at an all-time high, which is awesome, but remember that those homes are future inventory, and supply chain issues will still slow them down.
If you’re not looking to buy or sell, you can still take advantage of the 2022 market by buying a second home, rental home, or Airbnb home. A lot of people are taking advantage of the low interest rates by putting their money in real estate.
In summary, 2022 is looking like it might be the third-best year ever in DFW real estate. If you have any questions or want to know more, I have a complete summary of the market for the last two years. Just give me a call or email me, and I’d be happy to share that with you.