Market Update September 2022
Curious to know what's predicted for the housing market for the remainder of this year and next year? In this blog post, we will delve into three key factors that play a significant role in shaping the housing market: interest rates, inventory, and home values. While it's important to note that no one can predict the future with absolute certainty, analyzing current trends and expert opinions can provide valuable insights. So, let's explore what the future holds for the housing market.
Interest Rates: One of the defining features of 2022 has been mortgage volatility. Fluctuating interest rates have kept both buyers and sellers on their toes. However, experts are predicting that rates will stabilize in the 5% range for the coming months. This newfound stability is likely to bring confidence to the market, as buyers can anticipate relatively steady borrowing costs.
Inventory: Contrary to popular belief, the Metro Richmond area currently maintains a relatively low Months Supply of Inventory (MSI) at 0.7. This means that, on average, it would take less than a month to sell all the available homes if no new properties were listed. However, it's important to note that other markets may not share the same inventory situation. Additionally, Metro Richmond has seen a slight increase in age-targeted inventory, catering to specific demographic preferences.
Home Values: Resale home values have witnessed a year-over-year increase of 7.7%, indicating a healthy appreciation in the market. However, since the peak of the spring, values have softened, suggesting a potential normalization trend. Looking ahead to 2023, experts from the Home Price Expectation Survey (HPES) predict a home price appreciation rate of 4.19%. This level of appreciation aligns with historical norms, further supporting the notion of a balanced housing market.
Summary: In summary, the housing market is currently in a state of normalization, although it still leans towards being a seller's market. While it's unlikely that you will achieve the same results as your neighbor did in this competitive environment, it's essential to recognize the overall improvement in comparison to the market conditions two years ago. With interest rates expected to stabilize, a relatively low inventory level, and steady home value appreciation, both buyers and sellers can navigate the housing market with cautious optimism.
Please note that these predictions are based on the current trends and expert opinions available, but the housing market can be influenced by various factors. It's always advisable to consult with local real estate professionals for personalized insights and advice.