Welcome to the Dog Days

Every year, there is a distinct uptick in homes listed and sold during the school summer break. 2022 is proving an exception to the rule. We won’t know what sold until early in September, but looking at what was listed in June versus 2021 and 2020, things don’t look healthy. We have a 36% decline in listings from last year and a 34% drop from 2020. Less homes listed will obviously lead to less homes sold this summer.

This self-fulfilling cycle is worrisome. One headline at TheStreet.com sums up the FUD (fear, uncertainty and doubt) perfectly: Selling Your House Now Could Leave You Homeless. With sellers scared to sell and buyers finding it hard to swallow the increased interest rates, the big question is where do we go from here.

About nine months ago, I hung my hat on a prediction that we’d quickly go from the lunacy that was last year’s market to where we are now. Everyone told me I would be wrong, but unfortunately, I was drastically right. So, for those of you who want to listen, here is my crystal ball for the end of 2022.

The dog days of real estate are immediately ahead of us. While there are many forces tugging at each other, I believe that although inventory will remain tight, the market must swing towards being balanced. This means lower prices on listings, particularly above $600,000. I predict listing prices will drop between 10-15% by the end of the year and that this could last 2-3 years.

It may not be music to many ears, but those of us who rode the COVID crazy train in real estate knew just how unhealthy things were. It is time we breathed in some fresh air and sanity. The medicine may be difficult to swallow, but we will come out of this correction healthier.