The pandemic has had a shocking effect on the economy and real estate, with home prices soaring over 26%.
For both home buyers and sellers, real estate trends have seemed unpredictable over the last couple of years. But now, as things have started to cool off, a few patterns seem to be here to stay.
Whether you’re looking for a new home or ready to sell the one you already have, here are seven of the top real estate trends in 2022 to keep an eye on.
1. Mortgage Rates May Skyrocket
One of the top real estate trends in recent months has been a shift in mortgage rates.
Many home buyers rejoiced when mortgage rates hit historical lows in 2021. However, 2022 is likely to see higher mortgage rates, along with higher home prices.
For some, this might result in a ballooned mortgage. And with the current real estate market, some commercial real estate lender fresno, ca could actually shell out more cash than a property is really worth.
This can lead to what’s called an upside down mortgage. To avoid overpaying for a home, buyers should follow these helpful tips.
2. New Building Construction Will Trend Upwards
To avoid overpaying for a home in a seller’s market, some buyers may choose to invest in a newly constructed home.
Construction costs increased after the pandemic, partially because of a shortage of construction materials. However, some experts think these costs will dip in 2022.
Then, for those looking to buy a home, the idea of building their own will be more attractive than in the last couple of years.
Not only that, but home buyers with a list of requirements and must-haves may be put off by the current market, which is suffering from a decrease in inventory. The trend of building your own home makes sense for those who aren’t willing to settle.
3. People Will Move Away From the Big Cities
More and more people have been shifting away from big city life in favor of a quieter life in the ‘burbs. And this is having a major impact on real estate.
Real estate investors looking to hop on this year’s trends should consider investing in up-and-coming suburbs and small cities. If 2021’s any indication, Americans will continue to look for homes in mid-sized cities such as Myrtle Beach, South Carolina; Naples, Florida; and Fort Collins, Colorado.
You can also expect a boost in popularity in the suburban towns surrounding many big cities.
4. Larger Spaces Will Attract Renters and Buyers
There’s a lot of competition for real estate right now, and prices are going up. Many may assume that means renters and buyers will need to cut corners, opting for smaller, less-expensive homes.
However, the pandemic left behind a couple of real estate trends that might mean more people will be looking for larger spaces.
For one, more and more people are working from home, and they need ample space for a home office. Especially for freelancers and business owners, these spaces can often be tax deductible, so a home with office space will be especially appealing.
Another trend is the desire to have space for self-care. From outdoor green spaces to on-site gyms, many are interested in having room to care for their personal wellbeing.
Expect the demand for larger homes and apartments to continue to rise in 2022.
5. Buying in Cash Will Become the Norm
Investors have been swooping in to catch great real estate deals since the pandemic, and this trend continues in 2022.
Many of these investors are armed with cash, beating out traditional buyers who may need to first be approved for a mortgage. And understandably, many property owners are happy to take cash rather than wait around for a mortgage approval.
This is only adding to the competitiveness in the current real estate market. Expect cash buyers to continue to hold power in real estate this year.
6. House Hunting Becomes More Digital
Another real estate trend that was sparked by the pandemic is the trend towards more digital house hunting.
For years, people have been searching for homes online, looking at photos and videos. But this is becoming more common, even for lower-priced homes.
If homeowners want to sell or rent out their home, they must meet the demand for 3D tour footage and interactive floor plans.
Real estate agents may also expect more requests for online showings, especially from house hunters looking to relocate from a different city or state. Rather than travel to a different location, it’s becoming the norm to do virtual showings from the comfort of their own home.
7. Commercial Real Estate Is Making a Comeback
Commercial real estate has suffered over the last couple of years, with many retail shops and offices becoming vacant. But in 2022, that all might change.
Many businesses have taken advantage of vacancies, helping the industry to rebound. Offices, too, have seen more workers returning, though smaller office spaces may be more in demand than larger ones.
When it comes to multi-family real estate, many renters are searching for apartments and condos rather than paying the high cost of buying a home. However, these renters may have more special requests than in the past, such as wanting residential workspaces and other amenities.
Top Real Estate Trends in 2022
The real estate market has seen countless changes over the last couple of years, but 2022 might bring a bit more stability back to the industry.
Whether you’re a buyer or seller, watch out for these real estate trends in 2022.
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