Compass has released its Chicagoland 2022 housing forecast, based on a survey of 100 local real estate agents. And overall, they predict this year to be a sellers’ market. Though most Compass agents expect inventory to increase in 2022, they say lingering demand will still outweigh the supply, with prices continuing to rise.
In total, 44% of Compass’s Chicagoland agents predict inventory will increase in 2022. Thirty-nine percent say it will stay the same and just 18% think it will trend further down. But with many first-time homebuyers entering the market, most agents don’t believe that new inventory can fully meet demand. As such, 63% of agents foresee sale prices increasing in 2022. Similarly, 70% of respondents think rent prices will also increase.
“We will still be feeling the pinch of inventory at many price levels. Entry-level homes will still be hot with a ton of competition, which will likely result in multiple offers, especially if the home is in tip-top condition,” Amy Foote of The FOOTE Team said in a press release. She expects competition to resemble the conditions of 2021. “As rates start to creep up, I think we’ll see a temporary increase in demand as well since buyers will want to take advantage of the great rates before they go any higher.”
The Compass agents also expect mortgage rates will increase, exerting further pressure on new homebuyers. While record-low mortgage rates somewhat maintained affordability for buyers over the past two years, a resounding majority of agents — 81% — say mortgage rates will rise this year. The expected year-end rate currently sits at 3.74%. But agents are nearly split over whether that means first-time buyers will face greater challenges this year than last. Forty-two percent foresee no change while another 42% expect buyers’ struggles to worsen in 2022.
Naturally, the ongoing pandemic defines many of these market factors. And the lifestyle changes it spurred will continue to affect buyer preferences. Namely, when it comes to space. Thirty-seven percent of Compass agents say that home office space will be the most sought-after amenity in 2022, followed closely by more outdoor spaces (35%). The third-most desired home amenity, with 19% of agents agreeing, was updated kitchens.