The average local real estate market has had a lot of ups and downs in the last two years. Here’s what buyers and sellers need know about the Philadelphia real estate market in 2022 if they want to stay ahead of the curve and make the most of their next home buy or sell in Philadelphia.
Changing Interest Rates
One of the most-discussed topics we are seeing on the horizon is the possibility of increasing interest rates.
The Federal Reserve has been eyeing this interest rate hike as a way to battle inflation across the board. This volatility was created as we collectively adopted a crisis mode of operation during the last few of years to deal with severe changes in almost every aspect of our life, including economics.
Consumer spending and confidence have plummeted, and severe supply chain bottlenecks have taken their toll, and we are just now beginning to push through these challenges in order to right the ship.
Current estimates for increases in interest rates are ranging between a quarter and a half of a percent, which could easily shift the number of mortgages issued and the number of buyers looking to buy a home in Philadelphia.
Home Inventory
A mainstay of the dialogue happening over the course of our global pandemic complications has been the consistently low number of homes available for sale.
More recently, there has been an increase in available house inventory as more owners were prompted to act by the easing of COVID fears, as well as some for the sake of joining on the bandwagon in the hopes of profiting from a hot sellers market. Home inventory is likely to remain low in 2022, but we believe that as the year progresses, these difficulties will become less of an issue.
It’s unclear how the housing inventory will respond to interest rate adjustments, but it’s likely that fewer homeowners will refinance rather than sell their homes in Philadelphia.
Reigniting the Urban Markets
As the global pandemic escalated in 2020 and 2021, we witnessed a sort of exodus from highly urbanized areas.
People with the financial resources and the flexibility to work from home began to consider buying homes in less populous sections of the country, even if it was just a short distance from their existing location. COVID-related anxieties and anxiety are more bearable now that we have a couple of years of information and experience under our belts. They no longer seem insurmountable.
These same people who left their former urban homes may be looking to return over the next few years, and we also expect to see a big resurgence in foreign investment in these urban locales.
A Gradual Cooling Effect
The most widely held prediction for the real estate market is that housing appreciation, which has been nearly unstoppable in recent years, will be significantly curbed by 2022.
Appreciation will very certainly continue, albeit at a considerably slower rate. When looking at the big picture, real estate sales appear to be slowing as well. The ultimate goal at this moment, in the middle of a lingering worldwide pandemic, is to drive markets closer to pre-pandemic status across the board, rather than pushing for lavish growth.
Guidance Through a Changing Real Estate Market in 2022 and Beyond
When it comes to buying or selling a property, things change rapidly, so being up to date on the newest trends is critical if you want to get the most out of your experience. Contact our professional team immediately at (215) 385-3055 if you’re looking to purchase or sell property in the Philadelphia real estate market in 2022!