There’s just no getting around it: 2021 was not a normal year in any way, shape, or form. Unsurprisingly, the world of real estate is no exception to that rule — especially in the DMV. In the wake of the home-buying frenzy the pandemic onset ignited, a decade-long housing shortage converged with historically-low mortgage rates, shifting workplace dynamics, and new opportunities for young hopefuls to buy homes. The result? A fiercely competitive market that left many buyers unable to meet soaring seller expectations. The question on everyone’s mind now, of course, is what we can expect in the year to come. No, we don’t have a magic wand — but we do have experience, knowledge, and experts on our side. Keep reading for our top predictions on what the DMV real estate market has in store for 2022!

Nationwide Trends:

If you heard rumors of the market slowing down, think again. According to experts, home sales are expected to increase another 6.6% and home prices to rise another 2.9% on top of 2021 highs. A gradual uptick in mortgage rates will make affordability a top consideration for home buyers, especially the 45 million millennials aged 26 to 35 who are at a prime first-time home buyer age. Demand from these young households will mean the market stays competitive and fast-paced despite a small uptick in housing inventory as builders continue to ramp up production to meet demand.

Although affordability challenges will come from rising prices and mortgage rates, rising rents — which are projected to increase by 7.1% — will be a strong motivator for many hopeful first-time buyers. On top of this, all home shoppers will gain some key advantages that stem from a competitive, evolving jobs market. Incomes are projected to increase by 3.3%, and since many employers will be looking to attract and retain talent without impacting costs, we suspect workplace flexibility is here to stay. This should free-up potential home buyers to broaden their search parameters to include the suburbs and less pricey metro areas.

What does all this mean, exactly? That the suburbs — along with certain markets that offer good real estate value — will continue to attract an oversized share of attention. And while this demand may seem to have reduced the relative affordability of many such areas, they still offer a lower price per square foot and in return, plenty of opportunity for buyers.

The bottom line? On the whole, the housing market will remain competitive, but buyers will have new ways to confront these challenges to make their real estate resolutions a reality.

➤ For more resources to help you with the sale of your home in 2022 check out:

• 5 Luxury Renovation Tips To Boost Your Resale Value
• How to Price Your Home to Sell
• 4 Things to Know About Staging

Predictions For The DMV Real Estate Market:

Let’s stay a bit closer to home, shall we? According to Danielle Hale at Realtor.com, “[Experts] are expecting price gains in the DC region of just 3.8% in 2022,” meaning our market should largely mimic the overarching trend of moderately rising prices projected for the nation as a whole.

Mortgage rates — which have helped offset rising prices for buyers — are also expected to rise in 2022, but will continue to favor borrowers.

“We expect them to approach 3.6% by the end of 2022. That is higher than we’ve seen in the last couple of years, but if you take a step back and look at a broad historical context, rates are only slightly above the record lows we hit in early-2021,” Hale said.

While even modestly rising prices in 2022 will continue to price many first-time buyers out of the market, Realtor.com expects that to be less of a problem in certain markets. DC, for instance, will be impacted less due to the concentration of higher-earning professionals here in the market for a home.

➤ For more resources on buying in DC in 2022 check out:

• Buying a DC Investment Property
• Everything You Need to Know About Buying a Luxury Home in DC
• The Price of Luxury Living in DC

Seeking more DMV real estate market insights? We’re just a few clicks away.