2022 real estate market: A reprieve for buyers is unlikely

SNOHOMISH — The 2021 real estate market?

“Totally insane,” said Kellie De Velder Mayo, an agent with John L. Scott Snohomish.

How about “wild, crazy or frenzied?” Ask other market participants and they’ll offer a similar appraisal.

“With the exception of one or two listings, everyone got multiple offers and tens of thousands over list price,” De Velder Mayo said.

Now the question is, what’s in store for 2022?

“I think it’s probably going to be about the same,” De Velder Mayo said.

She expects the supply of homes to remain low, with sellers anxious to list their houses until they find someplace to move.

“One of the problems is where are you going to go?” De Velder Mayo said.

Buyers are unlikely to be deterred by a recent uptick in mortgage rates, real estate agents said.

At the end of January, the average 30-year fixed-rate mortgage was 3.73%, according to a Bankrate weekly survey. Rates hovered around 3% for much of 2021 but should be closer to 4% by the end of this year, according to economists at the Mortgage Bankers Association.

“The buyers are still out there in droves because a lot of them didn’t get the house last year,” said Dafna Shalev, a real estate agent with the Cascade Team in Bothell.

Home prices will go up, though not as rapidly as in 2021, real estate agents said.

In Snohomish County, the median closing price for a single-family home (half sold for less, half sold for more) in December was $700,000, up 21% year over year, according to recent statistics from the Northwest Multiple Listing Service.

Windermere Real Estate Chief Economist Matthew Gardner expects prices to rise by more than 10% in Snohomish County, according to a Jan. 6 news release from the listing service.

Are there any signs of hope for buyers?

Lynnwood real estate agent George Caudill of Pacific Properties thinks so.

“I think there is going to be more inventory out there for people to choose from,” he said.

Caudill has a record 11 homes lined up to list in March. Sellers who are nervous about COVID-19 are getting more comfortable allowing prospective buyers into their homes, he said.

The market has been surprisingly strong in January, Caudill said.

“I do think it’s going to be a very competitive market — it’s already showing that,” he said.

Competition will remain fierce for homes priced between $450,000 and lower — a more affordable range for many buyers, Caudill said. Buyers are also facing competition from investors buying and flipping homes.

De Velder Mayo said tech workers from King County continue to move to rural Snohomish County with plans to work from home. With available homes in short supply, the influx has put even more pressure on the market, driving up prices in some areas. Granite Falls and Sultan, in particular, have become real estate hot spots, she said.

The traditional spring real estate market may kick-off earlier than normal, said Jon Walsh, real estate loan manager at Peoples Bank in Everett.

“The uptick in (mortgage) rates right now is pushing some people into the market a little sooner and creating some urgency,” Walsh said.

Washington was the 15th-most-migrated-to state in the nation last year, according to a recent webinar from Fannie Mae, which cited moving data from U-Haul.

“More buyers are moving in; demand will continue,” Walsh said.

With the scarcity of homes for sale, many buyers have turned to new construction, said Casey Fuller, mortgage loan representative at Peoples Bank.

“The builders are backlogged, and the cost of materials has increased, as well,” Fuller said.

Fuller advises buyers to talk with a loan officer and secure mortgage pre-approval before starting a home search.

Shalev, the Bothell real estate agent, said she caught a glimpse last year of a more balanced market ahead.

“I had listings that sat on the market a week or so — a slow market — where my sellers did not get as much attention as they were hoping for.”

Still, she said, buyers “have really got to be prepared to go all the way” to get the home they want.

With home prices and mortgage rates rising, don’t wait, Shalev said.

“The longer the buyers wait, the more they will have to pay,” she said.

Jacqueline Allison: 425-339-3434; jacqueline.allison@heraldnet.com. Twitter: @jacq_allison.