The real estate industry is a constantly evolving beast, always subject to fluctuations in supply, demand and price. In light of the last 18 months, after a global pandemic brought house sales to a grinding halt for much of that time, it’s only reasonable to expect even greater upheaval when looking forward to the year ahead.
Whether you’re a buyer, seller or investor looking to dip into the real estate business in 2022, there are a few phenomena you should expect to see. Of course, it’s impossible to predict the future with 100% accuracy, but careful consideration of the current climate does indicate that the following trends are likely to unfold in the coming 12 months.
With sellers unable to list their properties for a large chunk of the last year-and-a-half – and with buyers prevented from taking their first step onto the property ladder or climbing higher – it’s only natural that there was a flurry of activity as a result. 2021 witnessed a resurgence of the market and although plenty of transactions are forecast to occur next year, too, there is likely to be a drop-off in deals getting over the line and a deceleration in the increase in house prices going forwards.
Mortgage rates on the (slight) rise
The economic slump engendered by the pandemic prompted mortgage providers to offer some of the most attractive interest rates in recent memory. Both 2020 and 2021 saw buyers take advantage of generous mortgage offers, though that is unlikely to continue next year. Nonetheless, interest is not projected to rise astronomically and those who take the time to look for the best mortgage rates should still be able to benefit from very attractive deals in historical terms.
The tech influx
Advances in technology have already infiltrated the real estate market in a number of ways. From online comparison platforms to 360° images and virtual viewings, there are a plethora of ways in which those searching for their new home can scour the available options from the comfort of their existing one. Those capabilities are only expected to become more sophisticated as we move forwards, allowing developers to envisage planned renovations and expansions in 3D detail before projects even get off the ground. That’s exciting for everyone involved.
Realtors on borrowed time?
Another way in which technology has disrupted the industry is through the use of self-sale platforms like Redfin and ForSaleByOwner. Given that realtors take home a significant percentage of the final deal (5% commission on the average single-family home sale of $377,100 would net the realtor over $18,000), it’s only logical that sellers would look to save that expense if possible. Of course, realtors are unlikely to become entirely obsolete due to their market knowledge and practical skills, but 2022 will probably see more deals done without their input.
We can never say for certain what the next year will bring until it’s on our doorstep, but it’s likely that 2022 will witness eased competition, (slightly) less favorable mortgage rates, more tech-aided transactions and fewer realtor-driven deals.