Agent: Our 2022 Prognostications
What Lies Ahead in 2022
If you are reading this email, you most likely depend on the real estate market for your income. Here are our predictions for that market in 2022:
The pandemic has truly injected our market with steroids, as you are well aware. We see no appreciable slowing of this market any time soon. Over the last two weeks (the typically quiet Holiday period), it very much felt like a full-fledged Spring market. Fully executed contracts were flowing in and there was no slow down whatsoever during a period typically reserved for inactivity. Once more supply hits the market in January and February, desperate buyers will gobble it up quickly and we believe we will see another Spring Frenzy in early 2022.
Are we approaching a market like California? Where there are no down months? Well, while we don't believe our weather will ever allow for that, there is absolute certainty that the slow periods have really receded and the top of the market periods have expanded. Is this a product of the pandemic? Global warming (allowing buyers to visit properties more year round)? Low interest rates? Insatiable millennials (who are now desperate for housing after years of renting)? We believe all factors are present in what has been a massively expanding sweet spot for real estate transactions. What used to be a mid February to late August hot spot has turned into a beginning of January through end of November madness. We do not expect this to change any time soon. Our seasons, they are expanding.
Interest rates will remain historically low. While the Fed did announce an increase in interest rates, they should remain in the high 3% to low 4% range. With that announcement, many buyers will be scrambling this early Spring to "beat the rate jump" which will only increase this Spring's madness.
Didn't all the buyers already buy and all the sellers already sell? It certainly felt that way, right? But, the important thing to consider is the following: Many buyers lost out last year to multiple bids and got swarmed under the tsunami of the Spring and Summer markets. They decided that 2022 was their year. Further, many Millennials (who were content with leasing and City living) are finally having kids, and, after experiencing the City violence and civil unrest, have revisited that decision. There will be no short supply of buyers in 2022. Further, we are seeing sellers who bought just one or two years ago looking to profit on increasing real estate prices and what they saw their neighbor do (we are sure you have seen the same). Additionally, many sellers who were unwilling to open their home last March due to the pandemic could be more likely to open their home this year since Omicron appears less lethal than previous strains.
In summary, we anticipate a three year (yes, you read that right) run on real estate. As of this email, we are about 18 months into that three year mass transition. We predict 2022 will be as active, if not more so, than 2021. Buckle your seat belt and get ready to work.
As always, the David Frank Law Group will be here to assist you and your clientele with all of your 2022 real estate legal needs.
To a happy, healthy and robust 2022, HAPPY NEW YEAR!