Real Estate Market in 2022

The real estate market in the Willamette Valley is off to a very interesting start in 2022.

As expected, interest rates have started to bounce up. Not surprising to economists, lenders and real estate agents. We knew the record low interest rates of 2020-2021 would not stick around forever. What is crazy is the way consumers are responding. Buyers are in a panic. Because purchase prices are high, they think adding on increased interest rates will create a crash in the market. Not so.

There is a huge shortage of housing for all of the ready, willing and able buyers. “Who can afford these prices”, you ask. People who have large equity in their current home, that they can use to upsize or downsize. People who own their home outright and are moving to be closer to family. People who have good paying jobs that can work remotely from their dream home. First time home buyers that would rather build equity in their own home, then pay high rent to a landlord.

Another misconception is that we are going to see foreclosures flood the market. That is not likely in the Willamette Valley. A) Foreclosures were on hold during the pandemic. B) There are programs to help people stay in their home (unlike the 2008 era). C) Values are up. Most people can sell their home for more than they owe and pocket some money. The conditions just aren’t right for foreclosure, so don’t expect to see many in 2022.

Part of what is contributing to the buyer panic is that people are frustrated. They spent the last year throwing out offers and getting beat out time and time again. They just want to buy a home and they aren’t confident on how that can happen.

My advice to buyers: hang in there. It is a frustrating, tedious process, but it is doable. Know that the market is still very active and you are going to compete against other buyers. Stay in close communication with a trusted loan officer and listen to their guidance. Get yourself a good real estate agent and let them work for you. Listen to what they tell you about the loan eligibility of each home. Listen to their strategy for making offers. Don’t panic. Be patient. The right home will come together at the right time.

Here is to home ownership in 2022!