The real estate market is always evolving. Sean Robbins, a real estate developer from Portland, talks about what real estate trends we can expect moving forward in 2022 and beyond. Let’s get started!
Where Home Prices are going in 2022
Currently the housing market is still a seller’s market. A seller’s market happens when there’s a shortage in housing or more potential buyers than homes.
This is what Zillow says (one of the most popular online real estate marketplaces in the US):
‘’Over the next 12 months we are forecasting an 11.7% appreciation in U.S. home values. While that would mark a slowdown in appreciation—over the past 12 months the typical home has increased 17.7% in value—it would hardly be a relief for priced-out homebuyers. After all, even in this strong labor market, most workers won’t get anything close to an 11% raise next year.’’
Knowing this, note that home price appreciation is difficult to forecast. Economists do expect home price growth to slow down from historic highs.
You can also watch this cool video if you want more information:
Not to many options for home buyers
As mentioned above,this is probably the most important real estate trend for buyers. The inventory to buy new houses is incredibly low. In total, inventory was down nearly 30% in the early months of 2021 compared to the previous year (source).
In short, there weren’t enough houses for sale over the year to meet buyer demand.
Because of the pandemic, a lot of people were allowed to work remotely. They realized that they could be as productive at home as they would be in an office 100s of miles away.
So, it comes with no surprise that the top-ranked real estate markets are in faster growing southern and western regions (and away from the coast).
Here were the top ranked real estate markets for this year.
5. Tampa/St. Petersburg
7. Dallas/Fort Worth
We see this change continuing in 2022, since people started to realize they could work where they feel most comfortable. They don’t necessarily need to go back to an office in a city they don’t like.
It’s also interesting to see that there was just a shift in real estate. The total impact from the pandemic was less than the real estate industry expected.
During the spring and summer of 2021 the world finally took climate change seriously. A lot has happened too. Devastating wildfires, record heat, droughts, massive flooding, hurricanes, etc.. A United Nations climate change report concluded that we must act now to save the planet from even worse weather disasters.
But what does this have to do with real estate? Actually, quite a lot. Our sector is the largest contributor to greenhouse gasses and global warming. It’s known that buildings can account for more than 40 percent of carbon emissions and global energy.
Sean Robbins says that ‘’sector leaders and investors are ideally positioned to play a leading role in muting climate change’s worst effects. But unfortunately, many are not convinced yet’’.
Of course, nobody can say with absolute certainty, but there are currently no signs at this point that we will expect a big housing crash in 2022.
Here are some factors that will prevent a housing crash from occuring in the near future:
- A decade-long shortage of new construction homes.
- Population demographics
- The state of the US economy
‘’These are all factors that prevent a housing crash from occurring’’, says Sean Robbins. He states that the conditions that cause a crash are currently not present, and probably won’t be for a while.