Posted by Mark Gellman on Tuesday, January 4, 2022 at 5:23 PM By Mark Gellman / January 4, 2022 Comment
Now that 2021 Real Estate is in the books, what do I see happening in 2022
It's Mark Gellman, eXp Realty St. Louis, Missouri.
2022 Real estate will be consistent with 2021
Still a shortage of inventory, with 1.5 - 2 months of inventory, which will be a severe seller's market.
We do not see many pockets opening up, where there's going to be significant inventory opportunities.
There are a lot of prospective sellers that would love to sell and have great homes, but they don't know where they would move, so they are staying put.
New construction continues to be an option in many municipalities, although prices continue to increase as a result of increases in raw material prices, labor costs, and demand.
Interest rates will bump up a tad, should still be below 4% (historic low interest rates).
The biggest impact on the market will be the impact of iBuyers, instant offer programs and hedge funds.
One hedge fund/ Institutional investor buying in St. Louis, is planning on buying 800+ homes. That is just 1 fund.
Over 1000 homes in St. Louis, last year were bought by hedge funds/national institutional investors.
The trend of institutional buyers will continue to increase, impact traditional buyers, who are competing for the limited inventory.
Hedge funds/ Institutional Investors are paying over asking, cash offers and buying "as is", which is hard for traditional buyers to beat.
Hedge funds are holding the majority of homes they are buying for rental. They are buying as a hedge against inflation, as rental rates continue to increase, faster than home prices.
Buyers are going to have to continue to be patient.
Solid buyer representation is critical to win the bidding wars in today's market. Agents need to watch the market like a hawk and get their buyers to view homes the first day and write strong offers.
Incredible time to sell but can't take the market for granted. Preparing the home for sale and marketing to the highest level is still critical to sell homes for top dollar.
Investors, as discussed, are seeing rental rates increasing, and pricing for multifamily opportunities continue to skyrocket.
If you have any questions about buying, selling, investing - don't hesitate to reach out to us.
Cheers to an amazing 2022
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