By all criteria, 2020 and 2021 were wild. So many things happened all over the world and the costs of all things went up. How did that impact the real estate scene and housing trends? Can we expect home values to go up? Can the real estate market survive the current turbulent economic climate? No matter if you’re interested in selling or buying, here are just some of the biggest real estate trends to keep an eye on in 2022.
Mortgage rates are going up
According to economists, mortgage rates are expected to rise due to tightening monetary policies. Inflation is rising in many places in the world, so in the States, it came in at a 6.8% annual rate just last year, which is the highest in 40 years. On the other hand, unemployment is decreasing, dropping down to 4.2% in November. According to research groups, the US is expected to see mortgage rates jumping to an average of 3.3% in 2022 from 2.99% in 2021. Interest rates on 30-year fixed loans will also increase.
Demand for homes is rising
As stated above, interest rates and mortgage rates will rise, but the demand for real estate is predicted to stay just as strong as before. Many places in the western world are experiencing all sorts of shortages right now, but if we’re to trust experts, the housing shortage is here to stay for the perceivable future. In the States, the housing inventory or the supply of available houses reached the 1970s level, and this imbalance in supply and demand will lead to a big boom in homebuilding. States will start to deregulate land usage and help the construction industry accelerate its activities.
Look at some trendy destinations
In 2022, some destinations will emerge as a new must-watch property market, so it’s smart that you also keep an eye on these places and closely follow the development of the real estate scene there. For instance, Montenegro has been blooming for many years, finally becoming the real estate jewel of the Adriatic Sea. If you’re interested in engaging assets, you can find Montenegro properties for sale by your needs in Herceg Novi, Kotor or Tivat. There you can find mind-blowing seafront villas and trendy new apartments perfect for rent. South America is also very attractive for investors today, especially Nicaragua with under $500 per square meter. Colombia and Bolivia are also very affordable.
Second-home and high-rises trends
One of the new trends in real estate to keep an eye on is the boost in popularity of second homes, mostly among experienced buyers and owners. During the past two years of the pandemic, second homes and condos were largely overlooked because of the buyer uncertainty and proximity of condos to other people. However, as prices begin to rise and the pandemic begins to die out, this market will start to gain more attention. Many millennials who are looking to buy their first properties will focus on condos due to less competition, at least for now.
iBuyers will calm down
The pandemic caused a huge housing boom, so iBuyers or instant buyers started employing some aggressive tactics to get to their properties. Big buyers like Opendoor, Zillow Offers and Offerpad didn’t hesitate to offer above-market prices to sellers. According to experts, iBuyers who are still operational are going strong for now, but it is expected to see offers that are much more reasonable than before. In the iBuyer niche, it was not a secret that offers were inflated, but we can expect to see them stabilizing and getting lower. With that in mind, it’s important to highlight the fact that offers will still be very close to 100% of market value.
Wealthy international buyers will step in
Now that many countries are lifting their travel restrictions, it’s crucial to keep an eye on international buyers and their offers. While not all places are equally attractive to international (luxury) buyers, more and more destinations will pop up on their radar. And due to low housing inventory and good premiums, we might see wealthy buyers pivoting to some less popular markets all over the world. At least, they will become more flexible and choose to invest in properties that require some work. If you’re a domestic buyer, it’s smart to stay in the loop.
As you can see, there are a lot of things going on in the housing market—it’s just as exciting as ever. Hopefully, you will find a spot where you can invest and profit in 2022.
