The world is reawakening, and it’s time to look forward to how we predict the 2022 Greater Baton Rouge housing market will look. After a couple of record-shattering years due to Covid workplace changes and limited inventory, everyone seems to have their eyes on the real estate market.
Here are a few predictions Town & Parish Realty has for the 2022 Greater Baton Rouge Housing Market.
Sellers keep control
While we anticipate more homes to come on the market in 2022 than we have seen the past couple of years, the inventory will remain so tight that the sellers will stay in the driver’s seat. 2021 brought sellers 98.7% of their list price, and we don’t see that falling much in 2022 because of the simple law of supply and demand. We believe prices may continue to increase but not at the rate we have seen the past two years.
Buyers continue to face a competitive market
Before starting the home shopping process, buyers need to have all their “ducks in a row.” They will have to continue to make quick decisions and need to know where they stand financially before doing that. This means having money in the bank to cover downpayments and closing costs and getting that pre-approval before looking at the first home.
Rents continue to increase
Like homebuyers, renters also contend with limited supply and excess demand that leads to upward pressure on rents. Predictions for the 2022 Greater Baton Rouge Housing market where rentals are concerned, we expect rent prices to outpace home price growth in 2022. With affordability becoming a problem when it comes to purchasing a home, renters will have to also face more competition when those new rentals hit the market.
Affordability becomes a more significant problem
With home prices remaining at historical highs and rents rising, affordability is a threat. Throw in that we expect the Feds to increase rates at least twice next year, and you have a trifecta for a severe affordability problem. The chatter in the industry is that we may see an interest rate of 3.75% by the end of 2022. Compared to pandemic rates, that’s not such an alarming rate; it could price buyers out of the bigger home they wanted to purchase.
The renovation boom will continue
With the rise in work from home during COVID, many employers have allowed their employees to continue working from home. Just like working from home, homeschooling has taken on a new rise. These lifestyle changes brought on a surge of renovations. Renovating spaces for WFH (work from home) or Home Schooling were two of the most significant renovation projects. The outdoor renovations included outdoor kitchens and pools. We understand there is a six-month waiting list for installing a pool! Whether it’s large renos like these or more minor updates, we don’t see the renovation boom slowing down in 2022.