Date Archives: February 2022

2021 was a great year for home sellers. Record low inventory combined with low interest rates sparked the hottest seller's market in several decades. It wasn't uncommon to see homes fly off the market in less than a day, while bidding wars often drove sales 10-15% over asking price.

While typical real estate seasonality has cooled things off just a bit over the last couple of months, many sellers are wondering what to expect in 2022. If you weren't ready to list your home this year, you might be wondering if you missed the boat.

While there are most certainly changes ahead in 2022, it's still likely to be a great time to list your home. Here is what to expect:

• Mortgage Rates Will Rise
  In order to combat record inflation, the Fed is expected to make raise interest rates multiple times throughout 2022. Last year's record low interest rates were a major factor in the heightened level of buyer demand, so it's realistic to expect interest rate changes to slow the market down just a bit, especially in the back half of the year.
  
  
• Price Increases Will Slow Down A Bit
  Homes prices rarely fall, and there is no expectation that they will in 2022; however, it's safe to assume price gains will cool off a bit. The national median home price jumped 16% in 2021, and it's unrealistic to expect we'll see the same type of increase next year. It's probably safe to assume price appreciation will be in the ballpark of 4% to 6%.
  
  
• Strong Demand From First-Time Buyers
  Many first-time homebuyers were priced out of the market in 2021, so it's no surprise that many are looking to try again in 2022. This means competition will be fierce for starter homes at entry-level price points. First-time buyers still likely have some uphill challenges as rates climb and prices remain at all-time highs; however, we expect to see many first-time buyers return to the market in early spring.
  
  
• Inventory Will Start To Increase
  Sellers may face more competition in 2022, as a lot of this year's inventory challenges are likely to abate. The pandemic made some owners more reluctant to sell in 2020-2021, but a lot of those fears have started to dissipate. Additionally, worker shortages and supply chain issues caused major disruptions to the home building market in 2021. As these issues begin to normalize, we'll see an increase in inventory in the coming years.
  
  
• Buyers Will Still Prefer The Suburbs
  As more and more companies adopt a remote work model, employees are no longer tied to a physical location. Consequently, more and more young consumers are migrating to suburbs, rural areas, and even popular vacation destinations. Since remote work is here to stay, we should expect to see this migration continue well into the new year.

How Sellers Can Prepare for 2022
The hot seller's market of 2021 is likely to cool off in 2022. Despite increases in inventory and higher interest rates, we're still likely to see a seller's market next year. As home prices continue to appreciate, it's likely still a great time to list your home.

We get it, buying a home is complicated. No other purchase requires buyers to juggle so many moving parts at once. In fact, with the amount of energy and time required, buying a home can feel like a full-time job. It's no wonder it's so easy to forget about important items during the process.

However, forgetting details can actually make the entire experience harder for you. It's important to try to stay as organized as possible from the moment you start your shopping process through closing. To help, we compiled a quick list of items home buyers frequently forget to consider when purchasing a home:

1. Resale Value
   When buying a home in a hot market, you may need to make a sacrifice or two. However, resale value should not be one of them.  The average consumer stays in a home for about 7 to 10 years, so when it comes time to sell, you want to make sure you're positioned to make a profit. Location is one of the most important factors when it comes to resale value, so be sure to keep neighborhood quality and school district top of mind while shopping.
   
   
2. The Home Inspection Contingency
   A home inspection contingency protects you in the event the home inspection uncovers some costly issues. This is especially important for first-time homebuyers. You don't want to get stuck with a money pit that you can't afford to fix. Don't forget to make sure this is included in your offer. If your offer is accepted, temper your expectations until after the home inspection. You never know what might turn up.
   
   
3. General Homeowner Expenses
   Your down payment and closing costs are likely to take a chunk out of your savings, but it's important to have some extra cash set aside for costs after you move in. If this is your first home, remember there is no landlord around to fix problems. These repairs are going to come out of your pocket. Additionally, you may need to purchase a lawnmower or other landscaping products. We recommend saving an additional 1.5% of the home's total value for unanticipated expenses after you move in.
   
   
4. A Home Warranty
   The last thing you want is to face a costly upgrade, such as a roof replacement or hot water tank replacement, shortly after moving in. A home warranty is a great way to protect yourself from this potential scenario. Home warranties can cover a wide range of appliances and internal systems. Be sure to seek out a home warranty within one month of closing to get the best rates and terms.
   
   
5. Staying Calm
   Buying a home can be both stressful and emotional. You may fall in love with a home only to have your offer rejected. You may purchase a home and immediately face unexpected repair costs. In either scenario, you need to try to keep a cool head. Plan for the best, but prepare for the worst. Make sure to keep some extra savings on hand to deal with any problems.

Buying a home is a great way to grow your wealth and generate a return. However, it does require a significant amount of work upfront. Try to stay organized through the process and lean on your real estate agent for some extra help.

Due to the COVID pandemic, everyone has spent more time indoors over the last two years. Whether working from home, home-schooling the kids, or simply isolating for safety, the home has taken on a whole new meaning. With a new appreciation for the comforts of home, design trends are changing our living spaces for 2022.

Show-Stopping Kitchens

While the kitchen has always served as the hub of the home, that concept will be exemplified in 2022. Kitchens that focus on cooking, family gatherings, spacious layouts, and luxurious finishes will be in the spotlight. Expect to see a variety of quality kitchen appliances that simplify cooking, food storage, and cleaning chores. Open kitchen layouts that emphasize family gatherings and provide plenty of elbow room for guests will replace kitchens with small, closed-in spaces.

Dedicated Spaces

Multi-functional spaces that serve many purposes will take a back seat to dedicated spaces that address specific needs. In 2022, there will be a surge in spaces dedicated to work and relaxation.

• Home Offices – With so many changes in the workplace, home offices are making a big comeback. Forget working on the kitchen table or the living room desk; homeowners want dedicated rooms with all the functional features of a home office.
• Home Gyms – Rooms dedicated to physical fitness are trending. Whether it's an extra bedroom, a space in the garage, or an outdoor shed, homeowners are setting up home gyms with serious fitness equipment to stay in shape.
• Wine Rooms – Interior design trends show a big demand for dedicated wine tasting and storage spaces. With more homeowners socializing at home, designers are designing elaborate wine rooms with cold storage and comfortable seating for tasting parties.

Bold Colors and Patterns

Homeowners are stepping out of their comfort zones and taking risks with bold colors and patterns that boost their mood. Bold colors and patterns with intense hues and rich textures are topping the list. Bold paint colors in shades of teal blue, hunter green, and ochre, umber, and mustard are top sellers. Rich textures found in suede, velvet, mohair, and natural fibers are trending. Bold colors and patterns are showing up in rugs, upholstery, draperies, wallpapers, and accessories for the home.

Curves and Soft Edges

Curves and soft edges are replacing hard, straight lines in home furnishings and accessories. Architectural details like rounded ceiling soffits and walls, curved edges on kitchen cabinetry, and arched windows and doorways are trending in new home construction across the country. In existing homes, homeowners are incorporating this trend by buying sofas and chairs with softer, rounded corners, drum tables, round chandeliers, and oval or round area rugs.

Vintage and Antique Furnishings

Designers are noticing a renewed interest in vintage, antique, and handcrafted furnishings that lend the unique charm and character of the past. Homeowners are turning to old antique rugs, velvet draperies, vintage wallpapers, pleated and ruffled upholstery, and tasseled and fringed throw pillows to create a warm, inviting home. To prevent a stuffy atmosphere of days past, vintage and antique furnishings are being combined with decorative elements in bolder colors that feel more playful and less traditional.

Relaxing Atmosphere

In 2022, emotional wellness continues to be a major factor in home design trends. Homeowners are focused on ways to bring more natural light, ventilation, and healthy elements into their spaces. Design trends emphasize organic materials like wood, stone, and ceramic, relaxing features like fireplaces and waterfalls, and healthy air quality with more indoor plants. Homeowners want interior elements that promote a relaxing home atmosphere and a balanced mindset in uncertain times.