These are the things I’m keeping my eye on in real estate this year.
We’re already a month into 2022, but I still wanted to bring you my thoughts on the market this year and what we might be seeing.
My first thought is that we are likely close to the market’s peak. We’ve had growth in our real estate market each year for the past nine years. If you look at every other real estate cycle in history, they always last from seven to 10 years. If we aren’t already at the top, we’re very close to it.
Another thing I know is that the real estate market is not likely to crash this year. However, values may decrease slightly depending on your location and property condition. Those factors will matter more in the next few years.
Prime real estate locations have changed and will continue to. COVID has changed the way we live and work. A lot of people who had to commute to the city don’t have to anymore or only do it a few days a week. There are more and more companies that no longer need office spaces. Residential and commercial real estate will look a lot different in the future.
If you can reposition your real estate, it’s a great time to do so. You can sell something you’ve owned for a while to buy something you’ll own for the next 10 years. I’ve seen a lot of smart investors do this, myself included. It’s all about repositioning your investment equity into another, better asset.
“Buying good real estate is still the best long-term investment you can make.”
Another thing to watch out for is an increase in real estate licensees flooding the market. There are going to be a lot of people in real estate that don’t have the experience to navigate a changing marketplace. The same thing happened in 2008, and it’s a sign that things are going to change.
Buying good real estate is still the best long-term investment you can make, period. That doesn’t change no matter where you’re located or what market you’re in. If you buy good real estate, it will stand the test of time. That should be what your focus is on.
Finally, I’m keeping a close eye on supply chains in 2022. This was one of the major reasons we’ve had such a lack of inventory in the last few years. Home prices went up, the cost of building went up, and homes took longer to complete. Compared to home values, rental prices spiked in some areas higher than home values did.
I’m watching all of this for you as we continue the year, and I’ll keep you updated with any changes. If you have questions about anything discussed in today’s video, the real estate market, or real estate in general, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.
