2022 Hampton Roads Real Estate Market Trends

It's no secret that 2020 and 2021 were crazy years for our Hampton Road real estate market with waived home inspections, hefty appraisal gap guarantees and record low inventory, but will 2022 be more of the same?

There are predictions that home values will continue to increase, which is mostly due to supply and demand. Simply put, there just aren't enough homes on the market for the amount of buyers who are shopping.

Agents at The Verity Group are seeing trends that we've seen in years prior surface again. Along with increasing loan rates, our agents are repeatedly seeing offers that are waiving home inspections or are requesting them for informational purposes only, multiple competitive offers on a single home, hefty appraisal gap guarantees, and generally low inventory.

If you're in the market to purchase a home in 2022, this article is for you! 

1. Increased Interest Rates Interest rates impact the price and demand of real estate, reflecting that the lower the rate the less it will take to get a mortgage. The changes in interest rates can greatly influence a person's ability to purchase a home. Experts are predicting that home prices in the Hampton Roads and the surrounding region will increase by 4% and also see a steady increase in mortgage rates.

2. Informational Purpose Only Home Inspections 

Writing an offer that includes a home inspection for "informational purposes only" will help give a buyer an advantage in a multiple offer situation. Home inspections are so that buyers can make well-informed decisions on their investment and get to know the ins and outs of the home before signing the final papers. A home inspector will focus on the major systems of the house, how old those systems are and how well they function. Our agents at Verity Group always highly recommend having a home inspection performed, but also have a few tricks up their sleeve should you find yourself in a position to waive it to win the bid.

3. Appraisal Gaps 

If you are financing your home purchase through a mortgage company, be advised that most lenders will require an appraisal. This report, performed by a third party who does not work for the mortgage company will assess the value of the home based on other home sales, square footage, age of the home, etc. In a strong seller's market, many buyers are offering an "appraisal guarantee clause." The appraisal gap is the difference between the fair market value that is determined by an appraiser and the agreed price in the contract. The Appraisal Guarantee Clause states that the buyer will be responsible to pay the difference. Your Verity Group real estate agent can provide more information on an Appraisal Gap Guarantee, and help you navigate writing a strong but manageable offer to help secure your next home.  

4. Supply and Demand  
It's pretty basic economics, but when the demand for housing is higher than the supply that is available, that commonly means that home values and prices rise. Experts are stating that while the increase won't be rapid as it was in 2021, home values will continue to rise in 2022.

Now the big question that's on everyone's mind - are we going to see a housing market crash in 2022 or in the near future? While we can't predict the future, we can pay attention to trends and our agents aren't predicting a crash anytime soon. The demand for housing is still too high. If you are waiting for prices to drop before you purchase a home, you may be in it for the long haul. While the upfront costs of purchasing a home may be higher in our current market, you may actually end up paying MORE if you hold off on purchasing a home in anticipation of the market calming down. If you're considering purchasing a home, but are curious if 2022 is the right time to do it, message us today to schedule a complimentary one-on-one consultation.