5 Housing Market Predictions 2022: What Can Real Estate Stock Investors Expect


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From a massive selloff in tech stocks to the Russia-Ukraine crisis, which has jolted oil supplies, there has been no shortage of market-moving events this year. With uncertainty looming over the market, it’s time to put your head back into work and do more research to avoid further panic. One of the best ways of doing it? Checking out the latest housing market predictions.

With the real estate sector being one of the most reliable indicators for predicting a recession or economic boom, it has become increasingly important to make sure you are on top of your game when analyzing the space.

So without further ado, let’s get into the five predictions you need to know about this year.

  • Property Valuations Will Rise in the Short-Run
  • People Are Moving to the Southern States
  • Lodging and Commercial Real Estate Is Under Pressure
  • Mortgage Interest Rates Will Drive Buyers Out of the Market
  • REITs Will Remain an Outstanding Investment in Real Estate 

Housing Market Predictions: Property Values Will Continue Rising in the Short-Term

An image of a residential block of houses, a hand holding a magnifying glass focusing on one

Source: Zentangle / Shutterstock

Inflation is the key buzzword on both Wall Street and Main Street. Due to the Covid-19 pandemic, the Federal Reserve had to institute policies to stave off the possibilities of a recession. Meanwhile, the government had to issue massive stimulus payments to individuals and businesses to ensure there wasn’t enormous unemployment.

Eventually, the US economy recovered as America became the first G-7 country to recover all lost gross domestic product (GDP) fully. However, an unintended consequence was rampant inflation. That was because people had money to spend thanks to stimulus checks, and there were supply chain disruptions because of the virus.

The Fed is looking to tackle these issues by raising interest rates. However, the damage has been done. Due to high material costs and wages, houses being built are expensive. The trend is not expected to let up anytime soon. Hence, one can expect housing valuations to keep moving northward in the short-run, before interest rates and rising inventories cool the market.

Southern States Are Getting Massive Traction

An image of a hand holding a cellphone, searching for housing, a housing match shown to the left of the phone

Source: Inspiring / Shutterstock

One of the interesting things to come out of the pandemic is the changing attitudes towards work-life balance. Our workforce is now majority millennials, who see work-life balance in a more favorable way than baby boomers.

During the pandemic, part of them realized that they wanted to enjoy a fuller life with their families, away from the hustle and bustle of the big cities. Hence, we are seeing a massive increase in demand for property in southern states.

The southern states have several advantages, including shorter winters than other parts of the country and more affordability. Some of the markets with the most growth have been in Tennessee, Florida, and Texas.

Housing Market Predictions: Hotels and Commercial Properties Will Remain Under Pressure

an empty, sunlit hotel room

Source: Shutterstock

One of the key trends that we saw during the pandemic was the struggle of hotels and commercial office buildings. Due to the nature of this crisis, people were traveling less and working from home. Both of these trends are unlikely to subside in the foreseeable future.

TSA data reveals that passengers are back, just not in the numbers they were before the pandemic. Meanwhile, home-working is on the rise as employers recognize how much time is saved, which can be redirected to other aspects of their business. Employees themselves also like working at home because they experience less stress and can continue working while running errands outside of the office.

Therefore, most companies have adopted some form of work-from-home in their policies. That means much more real estate is committed to single and multi-family homes instead of office space.

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