Top 10 US Real Estate Market Trends in 2022
In 2018, the real estate market had its fair share of ups and downs. The prices were very high at the beginning of the year, so the sellers had the upper hand. But in the last few months, prices have deflated to be in the buyer’s hands. The Urban Land Institute expected in its annual report that 2022 would be an uncertain year for the real estate market. The trends highlighted were overlapping with unexpected results. According to the recent NAR impasse, real estate prices are likely to rise by 5% or double inflation in 2022.
1 Suburbs as Second Cities
Investors have taken into account that young people are more interested in living in a suburban area rather than in crowded cities. They request houses surrounded by all facilities in remote or transit-oriented areas. Also, statistics by the Census Bureau show a shift in local nature. It has been estimated that 2.6 million people moved from bustling cities to the suburbs in 2016 and 2017. According to an emerging market report from ULI, 55% of new residents moved to the suburbs.
2 High AI
Artificial Intelligence has integrated itself into the real estate market with many of its benefits such as home security, access to the property, and efficient buildings. Also, this has been reported by ULI authors. Companies like WeWork use AI to analyze employees behavior in the office. Using of AI and automated Learning has helped to organize, design, and manage buildings.
3 Real Estate Market
Analysts have predicted low growth on several fronts. The population growth has a direct impact on the labors’ availability in the construction industry offering minimal improvements. GDP stats show 1.9% in 2022 which have a slow rate compared to the economic upswing earlier in the year. Replacing old buildings with new offices will be difficult.
4 Buying Houses by Millennials
The real estate market in 2022 will increase mortgage rates, but the demand for houses by millennium generation will not decline. However, the continued prices inflation will deter some of the potential buyers, especially first-time buyers. The millennials will account for 45% of mortgage loans compared to 37% gen Xers and 17% boomers who will complete 29 or 30 years in 2022. Also, they would be among the largest homebuyers in the next decade.
5 Increased Use of Technology
Technology that is spreading in the real estate market will be seen at 13% GDP in the US. The technology industry, such as startups, will seek services in the consolidated real estate market hoping to invest in their projects. Technology investment is likely to reach $5.2 billion, as CB Insights predicted. Organizations such as Fifth Wall have immersed themselves in the industry and invested millions. The traditional transaction will be disrupted and replaced with online home selling platforms.
6 Free Delivery in terms of real costs
E-commerce companies such as Amazon and eBay are always looking for new warehouse spaces. These spaces are being supercharged by the industrial sector of the real estate market. The possibility of speedy deliveries will participate in transportation gridlock in the major cities. Also, it would cause pollution near logistics centers. The real estate will have to look for possible solutions for investment opportunities, and land values. It is estimated that about $240 billion will be spent on congestion by businesses in the next five years.
7 Amenity and Apartments
Competition is so high in the housing market, where owners of apartments and buildings see that it is necessary to install new facilities in their buildings or apartments. Gyms and access to rooftops have become old investments. Nowadays, the buildings are equipped with movie theaters, communal gardens, dog runs, and even laundry services. These are all ways to attract renters, and even firms have accepted the challenge on themselves to create such benefits.
8 Transformation of Retail
Retailing started a new page and changed its equilibrium. Retails has transformed into writing short-term leases that one may even call them pop-up leases. The merchandising is overshadowing the services and tenants who have shorter contracts such as essential health care facilities, restaurants, entertainment venues, and many more. Investors and commercial developers will look for useful spaces for use. Also, whether it is a large or small company, they seek better spacing.
9 Sustainability on New Buildings
Climate reports show that there are possible serious changes. In light of such changes, sustainability is to focus on new buildings. As the emissions and effects on the environment are likely to increase in the next decade, the investors have focused their attention on increasing green areas.
10 The crisis of Affording houses
The US faces a constant crisis in terms of house rentals, both in small towns and big cities. According to the estimates, 50% of tenants pay 30% of their income on house rents. HUD also predicted that 12% renters spend half of their salaries on house rentals. High mortgage rates are said to reduce by 15% since 2015.