Realtor.com, Redfin, and Zillow have all put out some end-of-the-year predictions for the real estate market conditions for 2022. Let's take a look at what they're saying we can expect in the near future.

An Overview

I'm really impressed by the Realtor.com 2022 forecast. There's a ton of very specific information, not only about how things will look nationally next year but also predictions broken out for 100 different metro areas. Redfin approaches things differently with their 2022 housing market predictions. They choose areas where they feel they can predict and share those, rather than holistically predicting key market fundementals. Zillow takes a bit of a hybrid approach. They share general predictions about the housing market, and although they link to various other data-driven articles, they shy away from giving in-depth predictions illustrated with numbers.

The Consensus

Zillow offers a concise, if a bit obvious, assessment that the other sites affirm: "The reason home prices are rising so quickly is economics 101: high demand and low supply." Beyond this key dynamic in the housing market, what else do the three websites agree on, as we look toward 2022?

• 2022 will remain a seller's market
• Inventory will recover somewhat
• Interest rates will rise
• Rents will increase overall
• Home values will increase, but not as much as 2021
• The trend of people relocating due to remote work flexibility will continue

Builders are trying to build and create more inventory which will drive prices down, but they remain hampered by labor shortages, supply chain problems, and other rising costs. So supply will be up some, but not enough.

However, as we combine some more supply with rising interest rates which should lower demand, prices should begin to increase more slowly than the sharp increases we saw this year. With rent increases set to outpace the increase in home prices, it remains a good time for investors. About rental properties, Realtor.com says, "2022 will be an excellent opportunity to receive high yields given the solid demand and projected rising rental prices."

The Points of Disagreement

Fundamentally, all the sites agree on the basics, but there are a few points of contention. Zillow predicts 11% home value growth in 2022, while Realtor.com predicts a much more modest 2.9% increase of median home sale prices. They use subtly different metrics to express their predictions, but basically Zillow is more bullish than Realtor.com. Redfin doesn't make a specific prediction about this.

After this year, where many people moved to larger cities in Florida and Texas, Zillow predicts that people will move to smaller cities in the same regions. However, Redfin predicts people will opt for more affordable midwestern and eastern cities like Columbus, OH, Harrisburg, PA, and Indianapolis, IN.

Conclusion

Zillow, Realtor.com, and Redfin agree for the most part. It will be another busy year with people relocating and creating high demand for homes. First-time homebuyers and renters will still find themselves in a challenging environment with high home prices, soaring rents, and rising interest rates. Sellers can continue to get good prices, and investors will be in a favorable position to get good returns on their investments.