2022 Market Update & Predictions.

by Jamie Reece

As we start the new year, let's look at how we finished the year and what we look forward to in the market for 2022:

Looking Back at 2021
Housing Values - median sales prices climbed up 2.49% to $700,000 in Snohomish County in December and actually dropped 0.61% in King County - down $5,000 from $820,000 to $815,000.  However, when looking back a year ago, prices rose 28.6% in Snohomish County and 11.7% in King County.

Inventory - we achieved incredible low inventories in December with just 0.2 months in King County and 0.1 Months in Snohomish County... quite literally this is just 3-6 days of inventory. Of course, December is almost always the low point annually for inventory, but these numbers are the lowest ever by far.

Interest Rates - interest rates finished the year up 0.44% to 3.11%, and have been steadily rising for months. Of course, this has put pressure on affordability as this increase in rates makes homes about 5.5% more expensive over time.

Looking Forward In 2022
Housing Values - the vast majority of housing economists expect 2022 in the Puget Sound to provide more modest rates of price growth closer to the 5-10% range depending on where in the region you focus based on moderated demand created by higher interest rates and a slow, steady economic recovery as we work through ongoing cycles of pandemic challenges.

Inventory - will continue to be very low, historically speaking, though will likely be higher than we saw in 2020 and 2021. This may help ease some competitive pressures for buyers, though we still expect a wild mix of listings in the market... with some properties with 15+ offers and others needing price reductions.

Interest Rates - expected to continue to rise slowly and steadily as the Fed retires some of the economic stimulation measures in efforts to better control inflation. Our expectation is to have rates in the 3.5% to 3.75% range for much of the year.

Overall, we expect another dynamic year for the market with plenty of opportunities for buyers, sellers, and investors. It will be interesting to see how it develops.