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Economist expects “rocky road” for homebuyers

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Forecasts from some of the country’s largest real estate services firms predict a less frenzied housing market in 2022, with prices rising at a more moderate rate than during 2021.

Buyers should expect a rocky road over the next few months, suggested Daryl Fairweather, chief economist at Redfin.

Data compiled by Redfin indicate the number of homes available to purchase is at an all-time low, while prices are at record highs.

More listings are expected to be added to inventory in early 2022, but eager buyers in the queue will likely experience escalating prices.

Fairweather anticipated 100,000 fewer homes for sale at the end of 2021 compared to February “when housing supply last hit rock bottom.”

The imbalance in supply and demand means quick sales for many homeowners. About a third of sellers accepted an offer within a week of listing, up from 27% in 2020 and up from 18% in 2019, according to Redfin’s analysis. About 45% of homes went to pending status within the first two weeks of hitting the market.

Redfin’s analysis of November’s transactions showed nearly half (45%) of homes sold for above their list price, up from both a year ago when it was 35%, and from 2019 when 21% sold above asking prices. The average home sold for about 100.5% of its list price.

As for 2022, Redfin’s economist said, “Headlines and new restrictions related to the omicron variant of the coronavirus might fuel some uncertainty and volatility in the economy,” adding “In the short term, global interest rates, including mortgage rates, could fall. In this extremely tight housing market, we would quickly see a proportional increase in competition and home prices.”

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