Over the last two years, the housing market has seen some unpredictable changes due to multiple reasons. The COVID-19 pandemic, the associated inflation, and the Russian-Ukraine crisis played significant roles in these unpredictable changes.
A simple example lies in the fact that due to the pandemic, a lot of people lost their jobs or had to take a major pay cut to keep up with the rising economic crisis. As a ripple effect, many people had to sell their homes or give up their rental apartments.
Even Commercial Real Estate (CRE) properties saw a lesser number of leases due to lack of business. Deloitte research data from early 2020 found that the CRE sales and deals immediately fell due to the pandemic and restrictions on travel. Even construction became slower due to the lack of raw materials and labor across all sectors. All economic transactions slowed down, and so did real estate.
The Assetsoft team has been working with real estate businesses for over a decade. With our extensive experience and knowledge of the real estate market, we have carefully curated a list of the real estate market and investing trends for 2022. Read this article to learn more about them and understand which markets you need to tap into to make your business grow.
Top 9 Real Estate Tech Trends to Know
The Assetsoft team has been working with real estate businesses for over a decade. With our extensive experience and knowledge of the real estate market, we have carefully curated a list of the real estate market and investing trends for 2022. Read this article to learn more about them and understand which markets you need to tap into to make your business grow.
Here is how you can understand which markets you need to tap into to make your business grow.
A slow move toward normal
Though the growth is slower, it is inching closer to normal, much faster than in 2020 and 2021. Experts believe that home prices will no longer go down in 2022, and home demands and investments are slowly heading back to normal. Many remote workers are coming back to cities to work which is increasing the demand for homes around cities and office areas.
Home prices will increase
General housing prices will increase all across America. Many market reports back up these predictions. Realtor.com research reports say home prices will see a 2.9% increase in 2022. Zillow’s research about the housing market says home prices will increase by 11% in 2022. These are very positive reports for investors and real estate business owners.
Small portfolios might suffer
Though the housing market is recovering and home prices are increasing, small portfolio real estate owners might still suffer losses. Small portfolios do not have many backup options and emergency assistance facilities, making it harder for them to recover from the losses. Added to that, outstanding rent arrears are also a lingering problem in this.
Demand for rental spaces is high
Demand for rental spaces is going up in 2022. Many companies had completely given up their office spaces during the pandemic. Now companies are coming back to rent places in cities to get back in business. Remote work is again taking a backseat and Commercial Real Estate spaces, especially office rental spaces, are high in demand to cater to this crowd.
Open spaces are in demand in rental units
Hybrid working spaces are in high demand. Office spaces which can offer open spaces for the leisure of employees along with standard office space are essential. The pandemic has increased the importance of employee well-being, driving up the demand for hybrid workspaces.
Even homebuyers are now looking for open spaces inside their homes. The people who are still working from home want to find enough open space inside their homes to have the right work-life balance in place.
Mortgage rates will keep rising
The Fed increased their interest rates, and as a way to handle the rising inflation, the mortgage rates saw a steep rise since the beginning of 2022. But the scenes changed quite drastically; according to Next Advisor reports, in the last two years of the pandemic, the mortgage rates were at an all-time low at 3.1%. This was primarily due to the economic slowdown due to the pandemic. Come 2022, the mortgage rates saw a steep rise to 4.8%, and there is a prediction in the real estate market that these rates can go up to as high as 7%.
Short term rentals are in demand
During the pandemic, people were scared to go on vacations due to low budgets, the rising COVID variants, and the general restrictions in movements. With the new normal being established and people learning to live with the pandemic and the lowering number of COVID cases, the demand for short-term vacation rental spaces is rising in demand. According to research and market reports, the demand for short-term rentals will increase by 14.1% in 2022, a major rise from last year's demands.
Multi-family homes find more investment
According to Forbes news reports, even during the pandemic, multi-family homes saw a 50% increase in demand in the US housing market. This demand is here to stay in 2022. Multi-family homes are cost-effective for both tenants and real estate owners. They house many more people in the same landscape and offer common amenities to people inside one housing complex, which is otherwise impossible in a single-family home.
Managing these properties is easier for real estate managers and owners because multiple units are within the same space. The return on investment is also much faster due to the high demand for multi-family homes making this a smart investment for real estate investors.
Investing in technology is crucial
With the rise of remote work, it is vital that as a property manager, you can stay in control of your properties from any place. Investing in the proper selection of technology in project management and construction management has become all the more crucial. The right technology selection in PropTech will help you stay ahead of the curve and streamline your management process.