REALTORS® Get Ready For A Wild 2022
Looking back on the real estate market in 2021, it was akin to scenes in movies (picture an alien invasion or some land rush in a western) where entire families, belongings in hand, are running down the street, away from their homes and off into chaos. These folks weren’t escaping a monster from outer space or trying to lay claim to the back 40, no. They were bolting from the homes they’d just sold – in many cases – for upwards of tens of thousands of dollars over ask.
What might that kind of (recent) history foretell where 2022 is concerned? And how should we look to the past as a bellwether for what local agents can expect as the calendar rolls over to the New Year? Pitfalls and triumphs, alike, will be had, yes. But where, how, when, and what will be the best ways to be prosperous?
Kelly Melcher, from Opendoor.com, believes,” The seller’s market will continue into the 2022 spring homebuying season.” She also thinks it will be less competitive than the year before, which is great for buyers, but still relatively optimistic for anyone wanting to sell. Agents representing clients in 2022 are going to continue the search for inventory. Marketing to (or identifying) geographic farms will increase or become more targeted. And there will be a reliance on ensuring homes that do find their way to the market are in tip-top shape; the preparation not only cuts down time on market, but it also dramatically cuts away any fluff tied up in contingencies and things that could have been caught (and fixed) with an inspection.
“It’s really the severe shortage of homes for sale relative to demand,” says Odeta Kushi, “that will be the primary driver of continued positive house price growth.” As the deputy chief economist at First American Financial Corporation, she knows a thing or two about the impact on the housing market. There should be light around the corner, though, and as a buyer’s agent, it will be imperative to watch the pace at which home price appreciation begins to eventually taper off. In the short-term, however, and given available inventory, it’s expected that ‘what I want versus what I can afford’ should still be at odds with specific target markets (e.g., Millennials and first-time buyers) looking for something to purchase. In other words, prices might stabilize (don’t quote us on that), but the available inventory should remain relatively thin.
RisMedia has offered up these great trends to watch in 2022, and we think they’re spot-on in many ways:
- Affordability – This is truly going to be a “mixed bag as mortgage rates continue to climb and home prices rise. Realtor.com® expects income to grow 3.3% by year end and unemployment to continue declining from a projected 4.8% in the last three months of 2021 to 3.5% during the same time-period in 2022.” Depending on how closely these predictions come to reality, mortgage rates will still be volatile, and buyers will want to hop on low rates (pre-emptively understanding their credit rating and the amounts for which they can be pre-approved] early and check multiple outlets before taking a hit on their credit.
- The ‘Burbs – Neighborhoods away from uptown/downtown centers “will become increasingly popular compared to big urban metros as home shoppers search for more space—a trend brought on by the pandemic. However, as demand is expected to outpace new construction growth, buyers may have to sacrifice space due to affordably constraints.” The key here is to make sure buyers don’t make a bad deal just to get out of the drag of uptown/downtown because the siren’s song of backyard BBQs and pool parties beckons.
- Hispanic Homeownership – This segment of the population and their need for housing is predicted to rise in 2022, driving housing demand and impacting the homeownership rate for years to come. Realtor.com revealed that 1 in every 10 recent homebuyers is of Hispanic or Latino origin. [NOTE: Per the 2020 United States Census, The Hispanic or Latino population grew from 50.5 million (16.3% of the U.S. population) in 2010 to 62.1 million (18.7%) in 2020.]
It doesn’t seem as though there are going to be any easier or more difficult opportunities when it comes to selling or buying real estate in 2022. This business experiences peaks and valleys like other industries.
The difference is there is often a near-immediate recognition of trends. That, alone, gives real estate agents the ability to adjust their intake of facts, how they react to movements in the market (and real estate marketing) and to put plans in place to capture success!