10 ‘hidden gem’ housing markets poised for major growth in 2022, Realtors say – MarketWatch

December 16, 2021 by No Comments

Next year may not see the runaway home-price growth of 2021, but certain markets are set to see prices rise considerably in the new year.

The National Association of Realtors conducted a survey of more than 20 economic and housing experts to gauge their expectations of home-price growth, inflation and interest-rate movements in the year ahead. The group predicted that median home prices will rise by 5.7% in 2022, compared with a 4% rate of inflation overall.

Meanwhile, these experts projected that the Federal Reserve would opt to hike interest rates twice by 0.25%. On Wednesday, the Central Bank said it was projecting three interest-rate hikes next year, as well as three in 2023 and two in 2024.

Depending on whether the Fed’s current projection holds true, the rate of home-price growth could be even lower next year.

“Slowing price growth will partly be the consequence of interest rate hikes by the Federal Reserve,” Lawrence Yun, chief economist at the National Association of Realtors, said. Higher rates will tamp down the pace of home sales, which Yun projects will fall to 5.9 million from the annual rate of 6 million estimated for all of 2021.

Some undervalued housing markets could attract buyers in 2022

Amid this backdrop, though, the National Association of Realtors expects some housing markets to see bumper price growth. The organization’s economists came up with a list of 10 “hidden gem” markets where price appreciation will outpace the national average. These markets include, in alphabetical order:

  • Dallas-Fort Worth, Texas

  • Daphne-Fairhope-Farley, Ala.

  • Fayetteville-Springdale-Rogers, Ark.-Mo.

  • Huntsville, Ala.

  • Knoxville, Tenn.

  • Palm Bay-Melbourne-Titusville, Fla.

  • Pensacola-Ferry Pass-Brent, Fla.

  • San Antonio-New Braunfels, Texas

  • Spartanburg, S.C.

  • Tucson, Ariz.

“Several markets did reasonably well in 2021, but not as strong as the underlying fundamentals suggested,” Yun said. “Therefore, in 2022, these ‘hidden gem’ markets have more room for growth.”

Aside from location — all 10 markets are in the South or Sun Belt regions — these markets share other similarities. The markets were considered to be undervalued, meaning that the ratio of median home price to median household income was at the lower end of the spectrum for the nearly 400 markets the organization studied.

Economists also factored in considerations such as population growth, domestic migration and broadband service in identifying the undervalued markets.

The “hidden gems” list does differ from other rankings of emerging real-estate markets. For instance, Realtor.com projected that the following 10 markets would see the highest home sales and price growth next year:

  1. Salt Lake City, Utah

  2. Boise, Idaho

  3. <…….

    Source: https://www.marketwatch.com/story/these-10-hidden-gem-housing-markets-are-poised-for-major-growth-in-2022-realtors-predict-11639605633

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