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6 Trends Shaping the Real Estate Market in 2022

The real estate market can be hard to predict. The trends that drive it changes on a cyclical basis, and each cycle has its own unique set of circumstances and characteristics. That’s why you should understand some of the most important real estate trends of the moment. From density driving the market to interest rates at record lows, read on for an overview of what’s happening in today’s industry.

1. Real estate is a cyclical industry

A cycle is simply a period in which events follow a regular pattern. Real estate cycles are no different—they’re predictable, but only to a point.

For example, you can predict that home prices will increase during economic growth and low unemployment. However, you can’t predict how long those periods will last or when they’ll end.

The length of a cycle depends on its purpose. Some cycles are short-term (such as quarterly or annual), while others may be long-term (decades). The length also depends on what’s going on with the economy and industry at large. Suppose there’s an economic crisis brewing, and people don’t have jobs or money to spend on housing. In that case, it may take longer than usual for real estate prices to recover after they’ve fallen during an economic downturn (or even before then).

2. Density is driving the market

Density is the name of the game when it comes to real estate in any country. The need for density is due to the rising cost of living, which has made it harder for people to live close enough to their jobs or even afford homes at all. It’s also because there’s an increased demand from a populace that wants to live in urban centers while still having access to space and nature.

To accommodate these demands, developers are building taller buildings with greater densities than ever before. A recent trend involves building smaller apartments on higher floors with more amenities like gyms and pools. These units sell quickly because they’re more desirable than larger units located lower down in a building that lacks these perks.

3. The suburbs are back

The suburbs have long been the go-to housing solution for those who want to live in a convenient location but not in the middle of a big city. Though they were once almost synonymous with “boring,” many people are now choosing the suburbs over urban hubs because these areas offer more space, better amenities, and even lower prices than their city counterparts.

Suburbs are experiencing an influx of people from cities who are looking to buy larger homes at more affordable prices. In fact, many new developments are being built in suburban areas because they offer the best of both worlds. They have bigger properties with more amenities like pools and gyms—and a location that makes it easy for residents to get around without having to rely on public transportation.

4. Interest rates are at record lows

coins behind market rate decling

Interest rates are at their lowest level in over 50 years. If you are a homeowner or potential buyer, this is excellent news because it means interest rates on mortgages and other loans should remain low for some time to come.

If you are a potential seller, keep in mind that your home will likely sell for more when the interest rate is low. If you are an investor, this is also good news because it means you can expect rental rates to remain stable for the foreseeable future.

If you’re a renter or condo owner who wants to buy a house but can’t afford all cash, the lower mortgage rates could help you afford to buy without risking so much of your cash pile.

5. Functionality is no substitute for interior design

One of the real estate trends this 2022 is prioritizing the design and ambiance just as much as functionality. While buyers still want their homes to be functional, they are also interested in getting the most out of their investments. They want their house and condo to look nice and feel cozy, so they can enjoy spending time there.

This trend has been gaining momentum over the last few years due to the rise of social media influencers who showcase their homes and lifestyles on Instagram, Pinterest, and other platforms. Even bathrooms and kitchens, which are typically seen as functional spaces, are now being designed with aesthetics in mind. Bathrooms are now being outfitted with beautiful shower doors made of glass rather than the traditional shower curtain, while kitchens are being designed with open shelving, stainless steel appliances, and quartz countertops.

6. Millennials take longer to buy their first home

Millennials have taken longer to buy their first homes than previous generations. In fact, the average age of first-time home buyers has increased from a baby boomer’s 29 years old in 1981 to 34.4 years old today. This is likely due to multiple factors: student loans, staying at home with children longer, and a desire for quality over quantity when it comes to where they live.

The good news for millennials is that there are plenty of opportunities available now that could make homeownership more achievable than ever before. For example, interest rates are still historically low, which means you’ll be able to get a mortgage even if your credit isn’t perfect yet—and even if you don’t have much money saved up yet!

Closing thoughts

As you can see, the real estate industry is changing rapidly. The good news? You don’t have to be an expert in everything to invest in property. As long as you keep your eyes open for trends and do your research on a particular market or neighborhood, there’s no reason why anyone should shy away from investing in real estate!

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