July 3, 2023
The real estate market has seen many changes over the last two years. The housing market was set to boom before the 2020 pandemic, but lockdowns quickly put an end to many homebuyers’ ventures. As communities are slowly coming out of the pandemic, however, the housing market is gearing up for more sales. Here’s what real estate agents can expect in 2022.
Slower Price Increases
Moving into 2022, prices should increase more slowly than they have in previous years. As of August 2021, home prices had increased 18.5% from the previous year. However, predictions for price increases in 2022 range from just 2% to 16%. Nearly all predictions indicate that home prices will continue to rise, so this is a trend that real estate agents can most likely count on. However, there are a few outliers like the Mortgage Bankers Association which expects 2022 to start strong with a 15.3% year-over-year increase, yet end with an overall drop of 2.5%.
Increasing Mortgage Rates
Refinancing was all the rage in 2020 and 2021, but the market will no longer be as favorable for this kind of activity. Widespread predictions indicate that mortgage rates will most likely increase throughout 2022. As the Federal Reserve pulls back on its stimulus, prospective homebuyers will likely see their mortgage options get more costly.
Continued Demand That Exceeds Supply
Despite the rising cost of homes and mortgages, the demand for housing is expected to remain high in 2022. The same conditions that have reigned through 2021 are expected to continue, with a shortage of homes for those interested in buying. This is good news for homeowners who want to sell, as they should have an ample market of interested homebuyers anxious to snap up quality properties. Buyers, however, may want to wait until the market offers more variety.
Increased Demand for Commercial Space
In 2022, we expect the demand for commercial real estate to rise. Coming out of the pandemic, many companies are rethinking their business strategies. Smaller offices are replacing large office buildings as more people convert to working from home or a hybrid work model. A growing number of businesses are seeking real estate for fulfillment centers to meet the rising demand for online shopping. The medical sector is growing as well, with many companies looking to expand and run additional outpatient facilities.
Greater Homebuyer Interest in Suburban Living
Urban living lost much of its appeal during the pandemic, and many homebuyers are looking to pursue a more rural or suburban way of life. Demand is high for homes that have a nice yard or plenty of land for people to spread out across when they’re at home. Houses equipped with convenient home offices are in great demand as well with more people working from home and hoping to stay there.
Real estate opportunities in 2022 should be intriguing. Agents who have a well-established following and a sizable email list in hand will find themselves well-positioned to make the most of this landscape.