The New Year is here, and real estate investors want to know what to expect in 2022. Real estate has been a wild ride since the onset of the Covid-19 pandemic.
First, the pandemic essentially shut down the real estate industry. Then, when things started to open up again, pent-up demand contributed to a strong buyer’s market. Home prices have been on a meteoric rise ever since and demand is outpacing supply.
Read on to evaluate real estate trends in 2022. Explore topics like mortgage rates and suburban living in the New Year.
The U.S. Federal Reserve is expected to raise interest rates three times in 2022, with the first interest rate hike happening in about two months from now. This will be the first increase in three years.
As rates rise, the cost to finance a home is going to increase, curtailing buyers’ purchasing power.
The good news is that the rate hikes will happen gradually giving borrowers time to adjust to the new market conditions. At this point, the Fed is projecting three increases in 2022, three increases in 2023, and two in 2024. Individual rate increases are typically in ¼% to ½% increments.
Condos and Townhomes Are More Popular
One new trend in 2022 is the increasing popularity of condos and townhomes. The supply shortage and higher costs of single-family homes are causing many buyers to buy condos and townhomes instead.
With the current median price of single-family homes in Salt Lake County at $555,000 and the median price of condos and townhomes at $400,000, buying a condo is all about achieving the goal of homeownership within your budget.
Condos and townhomes have homeowners associations (HOAs) which handle the exterior maintenance of the home, the landscaping, some utilities, and some condo communities have amenities like swimming pools, fitness centers, and hot tubs.
Of course, there is a monthly HOA fee for this, but it tends to be consistent, so it’s easy to budget for, and condo living works well for busy people that don’t want to mow the lawn or garden on weekends. Just lock the door and go do your thing!
Another trend is the growing popularity of senior housing options. Construction of 55+ communities is occurring across the nation.
They are a popular option as seniors enjoy living in a homogeneous community. There are many amenities and activities to help seniors maintain an active lifestyle. In addition, the local homeowners’ association handles exterior maintenance, making your life a little easier.
Remote Work and Suburban Living
The growth and permanency of remote working are some of the significant changes caused by the Covid-19 pandemic. Nearly half the United States is working remotely on a full-time or part-time basis. Of the existing remote worker pool, 90% want it to stay that way.
The shift to remote work has profoundly impacted the real estate industry. Commutes no longer bind homeowners. As a result, they do not need to search for housing near their office.
Take workers in Salt Lake City, for example. Those who can work remotely can choose suburban living over an urban setting. Driving an hour or more to the office is manageable if it is only once or twice per month.
Real Estate Trends in 2022
Some major shifts are happening in the real estate market right now. Inventory is tight, and it is still a seller’s market. However, due to the single-family housing shortage, many buyers shift towards senior communities and multi-family homes.
Suburban living is also popular as workers no longer need to live near their city office. If you want to learn more about real estate trends in 2022, contact us today to speak with a professional.