While Omicron is likely going to have a significant short-term impact on the market, I am getting more convinced that 2022 will bring another year of material home price growth. Waiting for that price dip to find your Florida home seems riskier than ever.
Even though 2021 will only end up in the top quartile of home sales over the last twenty years, annual home price appreciation will end up being the highest over that time period. The supply/demand imbalance for both existing and new homes has driven up the price more than any time in the last twenty years.
We will continue to hear noise about rising mortgage interest rates bringing down home prices. However, even high-end expectations of 1% absolute growth in 2022 just isn’t enough to move the needle. Unfortunately, there are plenty of policy reasons why our government isn’t too concerned with what we are seeing with inflation. That means that inflation will carry over into new construction pricing, which will support continued price appreciation for existing homes.
The combination of market forces and shifting demographics will continue to drive people to our great state in large numbers. That means we will likely feel pricing pressures more than most areas. I feel your pain when I look around at our limited inventory and recent price appreciation. However, it just feels like 2022 will likely be a continuation of 2021 rather than a shift back to the pre-COVID real estate picture.