December 31, 2021
Market Update + Prediction
Monthly Prediction: Monetary policy will be of paramount importance in 2022
This is where we'll attempt to make a prediction about the future based on all the inputs we receive each month - whether it be boots-on-the-ground experience, roundtable discussions we're participating in, or the countless articles, podcasts, industry reports, and other media consumed. Read at your own risk!
Usually when we talk real estate, we talk micro. Micro markets, hyper-local trends, block-level data— you get the gist. But in 2022 we expect the macro to reign supreme. The Fed has signaled that they intend to raise interest rates, possibly in three separate rate hikes beginning in late spring. Jay Powell and his pals are aiming to tame inflation and stabilize prices. This leads us to believe that the first half of the year will be very robust in real estate, with buyers trying to lock in the lowest rates possible before purchasing power is diminished. With cash depreciating and rate hikes on the horizon, we expect to see a frenzied spring market, with sellers in the driver’s seat and multiple bids the norm. Refis should also be very active during this time.
If the Fed sticks to their plan, the spring buying frenzy should ease up beginning in the summer and continue through the remainder of the year. While prices will continue to rise, the rate of home appreciation will slow. Purchasing power will go down slightly, but buyers may have less competition in the second half, bringing the market more into balance. If we had to wager, we predict home prices to go up another 10-12% next year, with 6-8% of that increase happening in the first half. A portion of appreciation will be in the form of inflation (as was this year - but that's a topic for another newsletter). All this barring any black swan events, of course. Rest assured, we’ll be on top of it - and be sure to stay tuned to the Artemis Advisor for the latest.
Click here to read the San Francisco market report.
Click here to read the North Bay market report.
Thanks for tuning in, have a very Happy New Year, and we'll see you in '22!
NFA / DYOR - Not Financial Advice / Do Your Own Research
Information provided herein is for informational purposes only and is subject to change without notice. This publication does not constitute, either explicitly or implicitly, any services or financial advice by Artemis Real Estate. Information provided is not guaranteed, and Artemis does not guarantee the accuracy of any information obtained from a third party.
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