Will home prices keep climbing in 2022 or stabilize? Conn. real estate agents weigh in.

Nathan Cholewa, a real estate agent with On the Move Realty in Griswold, said he expects 2022 to level out the real estate cost spikes of 2021.

He said values will still hold strong “for the next few months and into the near future,” however, as homes are still selling quickly, and there are fewer available.

“Even with the slowdown since what we saw a few months back, I still find the market to be far stronger than it was in years past,” Cholewa said.

While it’s always a challenge to know what the housing market will do for sure, at least some local real estate agents expect a sustained performance from the market into 2022, especially in terms of single family homes.

Who is buying single family homes?

Norwich-based Navick Properties agent Jackie Kapusta said people looking for single family homes have been cash buyers. Kapusta also said plenty of people are willing to buy homes as-is, even with the possibility of damage or infestations.

“People just get that home inspection for the buyer’s knowledge, and they don’t necessarily require the seller to fix any of those problems, and it saves the seller later on,” Kapusta said.

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Andrea Kazantzis, owner of Kazantzis Real Estate in Brooklyn, said there are still plenty of out-of-state buyers coming from New York, Massachusetts, and elsewhere to purchase homes for themselves or as investments, attracted by the rural character and the affordability.

“It’s still cheaper on this side of the state,” Kazantzis said.

Cholewa said part of the interest in single family homes was because the prices of new construction, from land sales and materials, had been high, though land sales have picked up again.

A flood of foreclosures?

Kazantzis said part of this demand will also be spurred on by foreclosures, as pandemic related protections had prevented them in the past.

“I think there’s going to be a flood of them on the market,” Kazantzis said.

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Data from the Eastern Connecticut Association of Realtors shows single family homes have been steadily going up in price. For the first quarter of 2020, the median price of a home in Windham and New London counties was $225,000. The median in the first quarter of this year was $266,000, and the median for the third quarter this year, the most recent data, is $300,000. For each county, the availability of homes has been slightly less than it has been, and there has been an over 50% decrease for how long the homes stay on the market compared to 2020.

Home prices driving rental prices

Kapusta said that, with house price increases, rental prices have also been increasing, and people who were renters have been pushed into buying houses.

“Their rent is what they would be spending on a mortgage, and they would rather own something than have to pay the rental fees,” Kapusta said.

Kapusta said she recommends buyers come prepared for a multiple buyer situation.

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“Even if it’s a lower offer, cash usually prevails, and there’s usually less stipulations,” Kapusta said.

Cholewa also believes home sales will still be competitive.

“If you get that gut feeling that (a home) is right, move on it, because if you wait, you’re probably going to lose it,” Cholewa said.

Interest rates increasing

As for what’s soft, Kazantzis said that the interest rates will start to go up again, even though they are low in the grand scheme of things. Rates already rose from under 3% in the last few months, to around 3.5% now.

“Somebody who’s approved for a $300,000 house now with lower interest rates, when the interest rates go up, they might not be qualified, just because of where the interest payments would be,” Kazantzis said.

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Cholewa said the rising interest rates may also cool down the bidding wars that have become emblematic of the current real estate market. However, the pandemic is still an unpredictable element that has an immediate impact on real estate.

“People can be worrisome about listing their homes, about having individuals in and out of them and what is to come with their jobs, if the country ever has to close down again,” Cholewa said. “As long as we continue to work through this and stay out of the weeds, it should allow the real estate market to continue to prosper and have a strong 2022."

This article originally appeared on The Bulletin: Connecticut realtors predict continued growth in 2022, but normalizing