Sure, 2021 was one wild ride for every industry, housing included. Home prices skyrocketed, bidding wars finally returned, and inventory dried up—things were complicated. Will 2022 clear things out and bring solid trends that will arrive on the scene and stay here? Let’s look at some predictions for the real estate market in 2022:
Prices are still rising
Houses prices exploded in 2021. According to statistics, home sales prices increased by 18% in some places and more in just a year. This marked the most significant annual gain in home prices in many areas. Home values will not fall, but they will slow down with their rise. It’s hard to expect the repetition of last year’s double-digit percentage rise so that buyers can expect a little less pressure.
Mortgage rates will increase
Because of rising inflation, we can expect to see mortgage rates rise as well. The average 30-year fixed-rate loan already jumped just recently. According to most experts, there were some decreases of a few points, but that’s just a blip. In the future, people expect upticks to do better economic data. According to the Mortgage Bankers Association, rates will rise steadily throughout 2022, maybe even hitting 4% by the end of the year. As a result, mortgage originations are predicted to drop, primarily refinance.
New lux real estate markets are emerging
Property markets worldwide are changing, but some are and will continue to do better than others. Consider the following markets if you’re planning to invest, especially in lux properties. Firstly, consider Montenegro if you’re looking to break into the European market. The Bay of Kotor allows you to experience and explore the luxury real estate of Montenegro since both local and foreign investors have plans to turn this destination into the main attraction for the super-rich. Porto Montenegro is probably the top development and maybe future Monaco. Bangkok and Kuala Lumpur are best for investing in Asia, while the States place Texas as the best place for real estate development.
Insurance boost due to natural disasters
Every year, we get a new disaster that hits the planet, and those natural disasters will greatly affect real estate prices. For instance, in California, wildfires have resulted in home fire insurance blowing up, especially near forests. In 2022, it’s expected that hurricanes and storms that are hitting Texas, Florida, Louisiana and other similar destinations around the world harder and more frequently will impact the rates of these areas.
Smart homes
In sales, in 2022, we can expect to see more smart home technology present in homes and some innovative self-showing tech and 3D virtual tours. The next year will start the trend of 3D tech in the family rental industry, and this tech will result in virtual tours being used for different purposes from operations to marketing soon.
Short term rental will continue to do well
We can expect a rise in hotel bookings in 2022, but many travelers might still feel safer in short-term rentals, which allow them to relax and spread out in an entire home available to their use. Usually, families with young kids decide to book short-term rentals, booking mainly in the first half of the year. So far, young kids are not eligible for Covid-19 vaccines, which means that short-term rentals are safer for them. Investors with short-term rentals will still prosper in 2022.
Commercial real estate will change as well
Malls have been struggling for a decade now, but big-box chains like Target are getting more and more creative at drawing and retaining customers today. For instance, Target is becoming a little mall on its own, especially locations that have different in-shop sections and stores. In 2022 and the future, these chains will take even more steps to attract customers. They certainly have the budget to make a bunch of changes. What does that mean for the commercial real estate market? Malls will continue to struggle, and many will get replaced with these new desirable shopping spots.
According to predictions, in 2022, the housing real estate market will stabilize and normalize (at least when compared to 2021). We can’t expect any sharp turns, but investors and buyers can relax and take a break from head-spinning surprises. Expect some better deals, as well!