[Opinion]: Will the real estate market boom or crash in 2022?

The real-estate market of 2021 is a study in contradictions. Housing prices in the Midwest, for example, have grown to a median of $272,000, but the number of new home sales in the same area in the same timeframe has dropped 2%. The inventory of affordable homes, based on the income demographics of various areas, is frighteningly small. Interestingly, seven out of every eight homes are only on the market for 30 days or fewer. Those folks who can afford the higher prices are buying, and the decline in home sales comes from the lack of affordability regarding those of lower-income demographics.

Mortgage rates are still at historically low levels. Not only is prime itself lower than it's ever been, but the full APR is as well. In August of 2021, the rate was 3.02%. These low rates mean that homebuyers can put down far less than the 20% that was normal only five years ago. It remains to be seen if these low rates can increase home sales for lower-income buyers.

The low rates are also a boon to refinancers, who can lower their monthly payments without adding too many years to their terms. These refinances have staved off foreclosure for many folks who found themselves in trouble during the pandemic. Still, there is a backlog of foreclosures that are waiting for processing. Some of these are abandoned homes. Some of them have squatters in them. Some are just people who cannot afford their homes anymore. 2021 foreclosures are waiting for the backlog to be cleared before they can be processed.

Because of these foreclosures, 2022 looks to be very much a buyer's market. Fire sale prices and a huge inventory of such homes both mean that the beginning of the buying season will be fast and furious. As people scoop up these cut-rate homes, the prices will rise at the same time. That means that people who are late to the party won't be getting the bargains they thought they might have gotten.

Therefore, the prevailing opinion is that the market will boom in 2022. Once that train gets going it will be very difficult to stop, so buyers should prepare themselves for it. Until that boom, however, the rest of 2021 seems to look relatively placid. The different forces affecting home sales are balancing out, the proverbial "calm before the storm."

The market can be placid one minute and eruptively volcanic the next, especially in TX. Real estate companies in Dallas strive to inform themselves of the absolute latest trends so that they can properly advise their clients. It might be a good idea to seek out such a company to ask pertinent questions.