In today’s article, we are going to inform you about the latest real estate market trends in 2022, and with this useful information, you could create new opportunities for your business before the year ends.
Real Estate Market Trends in 2022 hide
To grow a business in 2022, it’s important that you comprehend Florida’s real estate landscape. As the results of the Covid-19 pandemic recedes, now is the time to think about finding new opportunities to generate business by serving sellers, buyers and even investors.
Real estate market current trends
While every local market in Florida is not the same, these trends are likely to play across the state, so it doesn’t matter where you are in Florida.
New listings for boomers
Due to the increase of the millennial and Gen Z generations, demand for homes will definitely outpace the supply of properties for sale. Sales associates have to look at how to generate listings and focus on their relationships with the current owners of those houses.
Bernice Ross, CEO and president of Brokerage! Inc. says that the boomers own up to 40% of homes nationwide. Many of these boomers are dealing with health issues, including mobility, and this could impact their ability to live alone.
Since we are talking about a generation that controls so much of the single-family home inventory, a huge percentage of these properties will be coming on the market in the upcoming years.
What experts recommend is looking for homeowners age 60-plus with large or two-story homes who may be ready to change things up and move to a single-story home.
Serve international buyers
For decades, Florida has been one of the favorite destinations for international buyers from other countries such as Canada. That trend was abruptly interrupted in early 2020 with the Covid-19 travel restrictions.
Now that borders are reopening, a surge of international buyers is expected. “Homes here are very affordable if we compare the costs with other resort locations, especially considering the high tax rates in South America and Europe”, says Steve Murray, an advisor to Texas-based RealTrends.
“Florida is also the top state for wealthy people and families who want to purchase residences outside their nations”.
Moreover, Canadians are also likely to return to the Florida market. According to experts, “International buyers will have a greater impact in 2022 than in the past two years.
Demand for more space
Moving on with the list of the real estate market trends in 2022, there’s the demand for more space.
Wanting more space amid Covid-19, people decided to trade dense urban areas for the famous suburbs. The burbs continue to remain in high demand, and new construction properties are getting bigger.
The number of realtor viewers of suburban homes listings has increased 42.1% since the onset of the current pandemic. Single family-home sizes are also trending a lot more these days.
According to Census data as well as an analysis from the National Association of Home Builders, the average square footage for new single-family properties rose up by 6.2% to 2.541 square feet.
Our advice for homebuyers is to get in touch with home builders near their area to see what project they have coming up. Also, F. Ron Smith, a Compass real estate agent that works for Smith & Berg Partners in Brentwood, California, says that new constructions typically have more light and a lot more indoor and outdoor flow than older houses.
Buyers are making compromises
Because inventory remains low during this super competitive pandemic real estate market. Those “dream houses” that tick all the boxes of your priorities, are elusive.
81% of buyers have had to make one or more compromises when purchasing in this hot market, according to Zillow. Nearly three quarters of homeowners are starting to consider a house improvement in the next year, with the bathroom being the first instance of the house to be repaired with a 52%.
If you’re facing some indecision when it comes to making an offer or not, realtors adore the 80% rule, says Megan Gallagher, realtor with the DEN Property Group in Austin, Texas.
This means if a house meets 80% of your criteria, you should make a bid. “You should list out 10 important features of the house, and if they’re equally important, then you can use the 80/20 rule”, she says. “If you have some higher priority rooms, then you have to focus on those and know that everything else can be a compromise”.
Homebuying will cost time as well
Not only is the homebuying procedure a financial investment, but it’s also something you’ve got the budget for, especially in this current market. Essentially, the average first-time homebuyer tours 10 homes in person or virtually, according to a report done by Opendoor, and only 33% toured 20 or more houses.
Moreover, according to Opendoor, 79% of first-time homebuyers who couldn’t be at work because of their home buying process, had to take off an average of 14 hours for their research.
Sometimes listing pictures can be deceiving, and you have to truly see things in person to appreciate them and to see if you connect with them. “My approach is if the neighborhood is the right one for you, go see the house”, says Yawar Charlie with the Aaron Kirman Group at Compass in California.
Keep an eye on foreclosures
Other important real estate market trends involve foreclosures. Millions of homeowners had to face a significant drop in their take-home pay during the worst part of the Covid-19 pandemic. While others own homes and rental properties turned to investments, but have gone without income for plenty of months.
Due to the moratorium on evictions, there is a backlog of people who have not paid their debts. This will cause an uptick, but not an onslaught as seen in the previous recession.
To leverage this trend you can find homeowners who are behind their payments but still have substantial equity due to appreciation. “You can tell them to sell quickly to clean up their past debts”, says Pappas.
Get in on the green house trend
Everyone wants to live in a healthy environment, especially with today’s work from home trend. Nonetheless, not everyone is willing to pay for upgrades such as solar panels or energy-efficient appliances.
What you can do is highlight a listed home’s ecologically friendly characteristics, including the benefits of an indoor-outdoor lifestyle. You can also calculate the potential annual savings in utility prices so that you make the listing more appealing.
Don’t forget inflation
From construction materials to home appliances, supply chain shortages are making prices fly to the roof. A global energy shortage is also increasing the cost of gasoline, natural gas and oil. Basically, inflation returned to the North American economy in 2021.
While some economists expect all these pressures to subside in 2022, professionals in real estate need to pay close attention to the changes in the Consumer Price Index (CPI) and to the Federal Reserve’s action that affect both mortgage rates and interests.
For buyers, you could highlight the “move-in-ready” aspects of a home that reduce the need for potential expensive repairs. As for investors, you can point out that residential and commercial real estate properties values tend to keep pace with inflation, making them appealing long-term purchases.
Consider industry consolidation
During 2022, industry consolidation will accelerate. More companies are being bought up, including real estate technology companies. Both private equity and publicly traded are moving into the real estate business, and that trend will duplicate this year.
The result of this will be a competition between traditional brokers, who will do anything to make their companies thrive within the real estate market. The influx of capital can make brokers cash out and retire from working or even look for a different career opportunity. For sales associates, the potential advantages include stronger technology and tools.
In this regard, understanding industry consolidation, like the rest of the real estate market trends we have talked to you about, gives you the chance to leverage your current knowledge and gain competitive advantage to achieve your business goals in the upcoming years.
Real estate market trends and how to mitigate a cooling market
While it seems that trends in the real estate market are not able to sustain the current house prices, it does not appear that the impact will be significant on the overall market.
A healthy market rebalancing is more likely to occur after a couple of difficult years. This is good news for people looking to purchase a house, as it means they have more negotiating power and choice in the coming weeks.
It’s also good news for the market, as a healthy housing market is vital to sustained growth. One thing to note is that with the cooling markets, your agency may want to consider the costs for the rest of 2022.
As you can see, there are plenty of real estate markets in 2022, and with this information, you can comprehend a lot better how the rest of the year will be for realtors and the housing market itself.
