There have always been long-standing rules about real estate ownership, including the three most important ones: location, location, location.
But the one constant about real estate investing is that nothing ever stays the same. Even the location rule, because preferred locations change from year to year, and certainly from generation to generation.
The first two years of pandemic life saw the real estate market bend strongly in the seller’s direction, as available properties were few and interested buyers were plentiful. There is some belief that, in 2022, more real estate will become available as Millennials make long-term decisions about their homes that they deferred during the pandemic.
As we approach 2022, it’s time to consider what the experts expect from the real estate market in the new year.
2021 Trends We’ll Be Up Against
First, a little background.
Since the arrival of the coronavirus, the real estate market influence has leaned heavily toward the seller and sometimes people investing in real estate, both novice and veterans. Available properties were seemingly non-existent while many people were looking to relocate due to loss of employment or other Covid-19 factors.
Prices for available housing were extremely high, and buyers were often forced to make non-contingent offers that were10 percent or more higher than they might have offered two years earlier.
At the same time, some investors snapped up available properties for flipping houses, taking advantage of the high demand and very low supply.
According to the Freddie Mac Home Price Index (FMHPI), the cost of single-family homes rose 17 percent from May 2020 to May 2021, the highest rate of increase in the history of the FMHPI, dating back to 1975.
Against this background, here are seven trends being watched. Remember that outside forces play havoc on real estate market forecasts, and a new surge in coronavirus threats could change these predictions, but this is what the market indicates as we head into the holiday season.
1. 2022 Will Be Better For Buyers (But Not By Much)
The climate for home purchases is expected to shift in the buyer’s favor in 2022, although the market will still lean to an advantage for sellers.
The FMHPI prediction for 2022 is 4.4 percent, a significant decrease. This change is due to a return to full employment for many Millennials who are now ready to buy a house post-pandemic for a better work-from-home environment.
What that means is that 2022 will be a better market for buyers than 2020 or 2021 were, but inventory is still likely to remain low.
2. It’s Easier to Shop for Mortgages Online
Back in the day, purchasing a house included several meetings, and at least …….