The month of December is upon us, which means it's time for our annual real estate predictions. Below we've identified 8 key real estate trends for the coming year. For a look back at last year's predictions, check out this article from our blog.
Our 2022 Madison real estate predictions
#1: Demand will be strong in 2022 and for the long-term.
Dane County is already the fastest-growing region in the state, and we expect this trend to continue for the foreseeable future. Retirees, who have the freedom to live anywhere, will choose Madison for its variety of amenities and access to good healthcare. Employees, who have the flexibility to work remotely, will relocate to Madison for the same reasons. Out-of-state investors will continue to target Dane County for its track record of solid and consistent returns.
Unfortunately, we believe climate change will also bring many new residents to Dane County in the years ahead. As residents in other parts of the country deal with severe heat, drought, and wildfires, many will migrate to Madison and other Midwestern cities in search of a better life. On top of this the city of Madison was recently named the #1 place to live in America by Livability.com. Our region's national reputation will only increase the number of people who choose to move to Dane County.
#2: Mortgage rates will approach 4%.
The Mortgage Bankers Association is predicting mortgage rates to rise to 3.7% by the third quarter of 2022 and to 4% by the end of the year. Fannie Mae and the National Association of Realtors are forecasting rates to rise by smaller amounts in the year ahead.
#3: Supply will remain tight.
Competing offers are off the charts for this time of year, so we're expecting many buyers who did not find the right home in 2021 to continue their search in 2022. The number of new foreclosures, new construction condos, and new construction homes entering the market will remain low by historical standards, too. Add all of this up and 2022 should be another year of low supply and heavy competition.
#4: Home and condo sales will decrease by 5 to 10 percent.
Simply put, low supply will limit the number of homes and condos sold in 2022.
#5: Prices will rise by 3 to 5 percent.
Thanks in part to rock-bottom interest rates, prices this year have sky-rocketed by 12%. As mortgage rates edge higher, we expect the growth in prices to moderate. In the big picture a more moderate rate of growth will be a positive development that supports the long-term health and sustainability of our market.
#6: New realtors will continue to flood the market.
A record number of people are working in the field right now, and we expect the number of real estate agents to continue to grow as more and more people seek a career that offers both flexibility and financial opportunity. With the vast majority of agents choosing to work from home these days, this will present some challenges for the industry and the consumer.
For example, how will brokerages ensure that agents are receiving the training and coaching they need to practice real estate with skill and expertise? And what will brokerages do to ensure that all of their agents maintain high ethical standards? These are important questions for every brokerage to address as our society shifts to a more de-centralized version of work.
#7: The industry will become more transactional and less personal.
In 2022 all of the big real estate companies will continue to fight for market share by investing heavily in their online platforms and technology. At the same time we'll see more and more agents use texting, direct messaging, and email as their primary forms of communication.
With so much of the day-to-day work and communication in our industry being done online, many consumers won't be receiving the guidance and personal attention that they need to feel confident about their transaction. This is a reminder that although technology will continue to advance within the world of real estate, it can't be used as a substitute for personal attention. At Mad City Dream Homes, this is something that we hold top of mind each and every day.
#8: Artificial intelligence will become a fact of life in the real estate industry.
Companies like Jarvis and Closers Copy are aggressively selling their services to realtors right now, which has huge implications about the notion of authenticity in our industry. Think about this: Now, as a realtor, you can outsource your website copy, your newsletter articles, your blog posts, your social media posts, and even your listing descriptions to artificial intelligence.
As real estate consumers (and consumers in general), we can no longer assume that what we consume online has been produced by a real person. When it comes to our team's content, you have our word that all of it will continue to be original, authentic, and created by us.
Our pledge to you for 2022
With so much rapid change occurring in the world around us, we want you to know that we will remain constant with our commitment to community, relationships, and real estate. So no matter what happens in the year ahead, we'll be prepared to serve you, your friends, and your family with our personal attention, a high level of expertise, and our best advice.
What are your real estate goals for the new year?
We recommend you start your planning right now before the market heats up again in early 2022. Just reach out to your preferred Mad City Dream Homes professional for a helpful consultation. We'll answer all of your questions and help you lay out a plan for all of your buying, selling, and investment goals in the year ahead.
Until then, we wish you a happy, healthy, and safe holiday season. Thank you to all of you who continue to trust us with your business and your referrals. We are truly grateful for you.
Your friends at Mad City Dream Homes
This article is published courtesy of: Dan Miller, REALTOR Mad City Dream Homes & RE/MAX Preferred