Housing Market Predictions in 2021 and 2022
While many industries have been suffering since the start of the pandemic, the real estate market continues to prosper. Regulations, such as, social distancing, and other restrictions have encouraged some people to move from urban areas to more rural places. As a result, the demand for property in smaller towns and suburbs has increased.
Starting with the 2008 property crisis which triggered economic stagnation all over the world, the situation in the real estate market has been relatively stable. In the second quarter of 2020, it started to gradually change because of the global COVID pandemic and a price fluctuation was visible for in various real estate markets. While condos and apartments in urban areas became more affordable, condos and private houses located out of city limits started to gain popularity which caused an uptick in prices.
The housing market in 2021
Even though the demand for urban condos has declined in 2020, it continues to recover in 2021. Many people decided to invest in property to preserve their assets, especially during unstable times.
The growing demand for houses in rural areas has triggered an increase in prices during the first several months of 2021. This tendency is expected to remain in the market over the rest of the year and at least during the first quarter of 2022.
The increase in demand for any type of real estate property in 2020 and 2021 is supported by low-interest rates. Even in a healthy economy, a drop in interest rates appeals to home buyers and creates increased demand in the residential real estate market.
As for the prices in the current real estate market, they tend to remain relatively stable over the first months of 2021. In addition to the high demand for housing, there is also a significant rise in the recent consumer price index report as a result of inflation rates in 2020. The current numbers are the highest since 1982 which indicate a weakness in the country’s economy.
The normal inflation rate is around 2%, while it was around 1.25% in 2020, however, it is expected to grow by 2.34% during 2021. When inflation rates are low it means that people tend to consume less in general, and price increases are not as significant.
Predictions for the 2022 real estate market