The crazy roller-coaster ride that has been the nation’s real estate markets could come to an end next year, the chief economist of the National Association of Realtors said last week.
Lawrence Yun said that 2022’s sales totals would be unlikely to best 2021’s, even if they will likely outdo 2019’s, based on his belief that more inventory is on the way, according to selections from his remarks provided by NAR.
“With more housing inventory to hit the market, the intense multiple offers will start to ease,” he said at NAR’s 2021 REALTORS Conference & Expo in San Diego, California. “Home prices will continue to rise but at a slower pace.”
Even with strong market conditions everywhere, Yun said, the fate of the work-from-home trend is not yet settled, nor is its ultimate impact on residential real estate.
“We are only in the first innings of work-from-home options,” Yun said. “People have not fully digested the work-from-home-flexibility model yet in determining home size and locational choice.”
In Massachusetts, work-from-home has helped fuel big changes in the Cape Cod real estate market, and big price run-ups. Statewide, total numbers of single-family home sales were up 14.7 percent last month compared to October 2019, while the median sale price was up 27.8 percent over the same period, to $509,000.
While the state’s market appeared to return to normal, seasonal cycles this fall, Yun said that several signs generally point towards a more normal and predictable market going forward thanks to a rise in average mortgage interest rates to 3.7 percent, from the current 3 percent, homeowners in forbearance being forced to sell and an increase in new housing construction.
Only 2.06 percent of all mortgages – totaling around 1 million homes – were in forbearance plans as of Oct. 31, according to the Mortgage Bankers Association, when federally-mandated forbearance plans lapsed. As that deadline approached, many homeowners exited forbearance plans and into loan modifications, signaling that many homeowners in forbearance may not have regained their pre-pandemic income, MBA Chief Economist Mike Fratantoni said in a statement accompanying the forbearance data’s release last week.
