Top 5 Predictions for the Snohomish Real Estate Market in 2022
And how it will affect you as a buyer or seller:
Prices will rise
New construction lead times
New mortgage intruments
Interest rates will rise
Snohomish Appreciation Will Spread to Exterior Communities
Watch the video to get the full breakdown
It’s hard to believe that we’re already in 2022! The holidays have come and gone, and the real estate market isn’t waiting around for anyone. But what does 2022 hold for the Snohomish Real Estate market? Check out the video below and read the blog post to hear my 5 predictions for the Snohomish real estate market in 2022!
Now, before we get to talking about the 2022 predictions for Snohomish real estate, we need to quickly revisit 2021 to frame how we arrived at the predictions for 2022. So, what we saw in 2021 was staggering price growth — prices in Snohomish county increased 22% YoY in 2021 compared to 2022. The average price point went up from about $589k to about $722k in the span of one year! That’s the highest one year increase we’ve ever seen in this county, and it caused a major home affordability squeeze on buyers.
With that said, let’s get to the predictions!
1. Prices Will Rise. But by How Much?
Prices will increase, but we do not expect them to increase to the level or at the rate that we saw in the past year. There’s nothing to suggest that we will return to a balanced-market growth rate of 3-5%, but we do see indicators that it would be safe to expect 10-15% year-over-year growth, but this growth will be largely supply driven. We are in a very tight inventory environment right now, and prices won’t stabilize until that inventory starts to go up a little bit and give some relief to buyers.
2. New Construction Lead Times
New construction, in 2022, will run 6-12 months in lead time. That means when you go to buy a new construction home, you should expect, on average, to wait 6-12 months until that home is ready for you to move in. Right now, in our market, you cannot walk in and buy new construction that’s turn-key. The only situations where you might see that is where a new construction home was under contract, and it fell through upon completion.
What’s driving this? There are a handful of factors driving this, but the two main contributors are this: builders simply aren’t building as many new homes as they have in the past, and the ones who are building new homes are having long delays due to supply chain issues and getting materials to the building site. Now, clearly you will be paying more in capitalized interest over the life of a 40-year mortgage compared to a 30-year mortgage, but it will dramatically lower the monthly payment obligation, which will open the door for a large pool of buyers.
3. New Mortgage Instruments
This is a big one, and we believe this prediction coming true will be necessary in assisting home buyers get into homes in this hyper competitive environment.
The 40-year mortgage will be introduced in 2022 by Fannie Mae and Freddie Mac. This will be out of necessity to alleviate the affordability issue facing a large portion of buyers, specifically first time home buyers. So, there’s a tradeoff, yes, but increased accessibility is a good thing.
4. Interest Rates Will Rise
The Fed has been talking about it since spring of 2021, and the conversations continued to pick up steam throughout the rest of the year. The Fed will begin easing interest rates higher in an effort to fight inflation, and that will have an impact on buyers’ purchasing power. Over the course of the last 7 years, interest rates have been historically low, and that in part was due to the failure that was the Quantitative Easing policy put in place from 2008-2013.
5. Snohomish Appreciation Will Spread to Exterior Communities
Sultan, Goldbar, Darrington — These areas will see higher levels of appreciation than more developed areas like Lynwood or Lake Stevens. The lack of supply in the developed areas, and the ever increasing price per square foot in the more metro/suburban areas of the county will continue to be oversaturated, and buyers will start considering the outlying towns, especially as work-from-home continues to be a more common employment status.
Conclusion
Will all of these predictions occur? We don’t know; they’re predictions! But we believe they are very realistic predictions based on reliable statistic indicators.
If you have any questions about the Snohomish real estate market, please reach out to! We’d love to talk more about where you are in your real estate search and how we can help you.
Are you ready to take the next steps toward buying or selling your home?
When you work with The Novak Team, you are putting to work the vast experience of some of the top agents in the industry, not just the area. Tap the link below to schedule a zero commitment consultation with me to see if it would be a good fit.