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the 2022 real estate market for bergen county homesThe 2022 real estate market for Bergen County homes will be unique.  This is because in some ways it’s going to be like 2021 and in others, not at all.

This blog has given you a statistical breakdown of the market every January.  It seemed to me, however, that this year required a different approach.  Hopefully this take on the 2022 real estate market for Bergen County homes answers all your questions.

Low Rates and Fed Chairman Powell

This is the last time you’ll see interest rates this low.  The impact of such low rates can not be overstated.  Personally I was thrilled to see Chairman Powell remain as head of the Fed.  Stability is extremely important and he has done a masterful job at getting through the economic ravages of the pandemic.

However, it’s time to change course and he’ll be doing that aggressively.  Inflation is a serious problem which must be addressed.  Chairman Powell has signalled 3 rate increases but some economists feel it could be 4.

Higher rates make mortgages cost more and eliminate many from qualifying to buy a house.  We’ll be at 3.7% by year’s end from our current 3% according to economists.  Most buyers qualify at 3.25% now and I expect 4% in December.

Inflation and Mortgage Banks

Inflation means your money buys less tomorrow than it does today.  This directly affects lenders who give out loans including mortgage loans.  This is because the money a bank gives you today to buy a house, is paid back in the future with dollars that can’t buy as much tomorrow.  What does a bank do?  Calculate the differential and adjust accordingly.

3.7% is where rates are projected to be at the end of this year.  This represents a 23% rise over our current 3%.  Because a bank understands it’s getting paid back with cheaper dollars, it makes an  adjustment for this with higher rates and more stringent qualifying demands.

Forbearance and Economic Stimulus

Mortgage forbearance and economic stimulus packages are ending.  Not everyone will get their jobs back so some will have to sell rather than lose their home.  The end of stimulus money will move people back to work.

Opening schools also allows parents to work again.  On the other side of this coin, we have people leaving rather than comply with vaccine mandates.  Still, we’re slightly improving every month.

The Pandemic

Scientists tell us that while Omicron is terrible now, it will be short lived.  The worst should be over in 4-6 weeks.

We have vaccines and medicine today to fight this pandemic.  Merck and Pfizer have just had their anti-viral pills approved.   Both said that they will have enough manufactured to really make a difference beginning in June.

While Omicron is incredibly contagious, it’s not at all as lethal as its predecessors.  Doctors have told me that viruses naturally mutate and grow weaker with every mutation.

The Result

Everything here defines the 2022 real estate market for Bergen County homes.

Higher rates removes many 1st time buyers and reduces what the others can spend on a house.  The end of forbearance puts  more homes on the market.  This is because many homeowners have enough equity buildup to sell and walk away with cash.

While we’ve improved tremendously, job growth is still nationally around 4 million light and New Jersey’s recovery is below the national average.  As a result, expect more foreclosures on the market too.

Fewer first time buyers means fewer buyers for move up sellers.  However rates won’t rise enough for this happen until late in 2022.  Hi end luxury homes will continue to do well all year because people at that level are financially strong enough and will be swapping out stock gains for real estate.

The 2022 Real Estate Market For Bergen County Homes

Buyers will be out in force taking advantage of mortgage rates before the rise becomes too much for them.  A building inventory will slow the pace of this seller’s market.  Analysts project 2% fewer sales for 2022.

There won’t be urban flight again.  Omicron won’t last long enough, is not as lethal and we have better medical treatments.  As a result there won’t be another surge of urban buyers this spring.

The 1st half of 2022 will be a strong market for sellers like 2021.  Unlike 2021, the pace will be a bit slower.  Appreciation will happen around 5%.  Will there be a crash?  No but we’ll softly land into a very different 2023.

Primary sources: Jeffrey Otteau, Lawrence Yun, Brian Buffini,,, National Association of Realtors

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