Real Estate Trends to Watch in 2022
They say that the only thing that’s constant is change and in the real estate industry, that certainly rings true. The industry has continued to evolve rapidly and it doesn’t look like it’s going to stop any time soon. From adopting new digital tools to changing consumer behavior to economic effects nationally and globally, new trends emerge. Keeping up to date with the real estate trends that shift each year – and even each month – is essential for informing your real estate digital marketing strategy.
Read on to learn more about the current trends that are expected to continue for the rest of 2022 and how they might change as we get further into the year.
5 Real Estate Trends to Watch in 2022
- Limited Inventory Continues
- Properties Moving Fast Fueled by Cash Buyers
- Ancillary Services are Growing
- Mortgage Rates Rising
- Home Values Increase at a Slightly Slower Pace
Limited Inventory Continues
According to the National Association of REALTORS (NAR) Double Trouble of the Housing Market Report, the shortage began in 2019 and has continued throughout the pandemic. And, the combination of low-interest rates and new construction halting during the height of the pandemic has also fueled the inventory shortage. Now, there are only about one million units for sale on the market.
However, demand hasn’t slowed down. There’s been an uptick in people investing in real estate and changing their lifestyles, resulting in the need for more properties, especially more affordable ones. Plus, homebuyers don’t have as many options as before, increasing competition and driving up home prices, making room for people with a bigger budget or a more appealing offer, such as waving inspections.
Properties Moving Fast Fueled by Cash Buyers
Also, as a result of high buyer demand surpassing inventory, properties are continuing to stay on the market for fewer days. According to the NAR’s February 2022 Confidence Index, properties are staying on the market for an average of 19 days in the first quarter of 2022. And, 84% of properties are staying on the market for less than a month.
Competition has continued to heat up as well with an average of 4.8 offers on every home, as reported by the Confidence Index. And, 48% of respondents to the report said that offers were above the listing price. In order to compete with other buyers, people are turning to cash offers, relying on the seller’s wish for a fast close and waving of inspections.
Ancillary Services are Growing
With the real estate industry so active, many real estate companies are pivoting to offering more services to increase their value and stand out to leads. According to a survey conducted by the National Association of REALTORS (NAR), 21% of real estate companies offer some ancillary services currently and they’re expected to keep growing. Some companies want to be a one-stop shop for their clients while also reducing their own costs by combining and broadening targeting efforts — marketing ancillary services for real estate gets in front of people who aren’t sure of what they need in the home buying or selling process.
Mortgage Rates Rising
Mortgage interest rates are rising at a fast pace – faster than they have in years. And, recently, the Federal Reserve announced that it will be increasing interest rates for the first time since 2018 in order to try and combat inflation. This increase, also combined with soaring home prices is set to rise mortgage rates, though it isn’t clear exactly how much interest rates will rise. As a result, many people who are searching for more affordable homes will have an even more difficult time, especially with the low inventory.
Home Values Increase at a Slightly Slower Pace
Because of the increase in mortgage rates, home values – which have skyrocketed in the past few years – are expected to grow at a slightly slower pace, but still remain high. Appreciation rates were around 20% last year, and Fannie Mae predicts that values will rise to 7%. Though values will still remain high, they won’t be as high as it was in the middle of the pandemic, giving slight hope to those who’ve been waiting to buy a home.
Many of the trends we’ve seen start in 2021 and carry over to the first quarter of 2022 are expected to continue and even grow throughout the rest of the year. Staying up to date on these trends and the state of the market is essential for informing your digital marketing strategy for real estate.
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