It has finally arrived, that time of year when everyone says farewell to 2021 and hello to 2022. If you are like most people, you are spending this time looking back at old resolutions, ambitiously making new ones, and most difficult of all, attempting to re-train your brain to write “2022” whenever you fill out a check. But for those considering buying or selling a home, or are generally interested in the real estate world, now is when one might pull out their crystal ball while attempting to predict what the future real estate market will look like in the new year. Will it remain scorching hot for sellers? Will the tables turn, and buyers will finally get a leg up? Will inventory remain low? Will interest rates begin to rise? It is anyone’s guess. But if one person might have an idea, it would be Ben Brady, CEO of Harcourts North America.
Ben Brady comes with a wealth of global industry experience. Having started in Australia before making his way to the United States, Ben has auctioned off more houses in the United States than anyone else and has sold over four billion dollars worth of property in the last five years. He has made a name for himself by innovating how technology is used in the industry while establishing the first actual non-distressed auction process in North America. Needless to say, if anyone would have a grasp on where the market in this country may be headed, it is him. So we asked him, “What are your predictions for the real estate market in 2022?”
“Over the past few years, many people have tried to predict what the real estate market is going to do. I think it is fair enough to say that predictions are only hopes and dreams,” said Brady. He is intelligently cautious when trying to figure out what the future has in store, but he still weighed in, delivering less of a prediction and more of an educated guess. “Keeping in mind that interest rates are still low and will continue to be very low from a historical nature for the first six months of the year, we believe the real estate marketplace, with the inventory at still minimal scale for the entire country, will still be a competitive marketplace for buyers and be a seller’s market.” Though Brady was adamant that when forward, there are two elements to be kept in mind: “One, increasing inflations will cause interest rates to go up. And two is that the distressed real estate marketplace has not shown the light of the forbearance issue as no banks are able to foreclose at this point and could add a huge influx of inventory to the marketplace.”
Adding to the unpredictability of the market is Covid, which continues to produce new variants that could change buyers’ and sellers’ behaviors in an instant. Brady acknowledged that there is always a risk of Covid or other unknowns popping up and shifting the market. Even still, when considering that, combined with potentially rising interest rates and the possibility of an influx in inventory, he still leans toward 2022, resembling 2021. “If we average it over twelve months, we still believe it will be a sellers marketplace for the entirety of 2022. Again, this is not a prediction. More just understanding the cycles.”
If we have learned anything over the past few years, it is as Brady hinted at: the housing market is, and always will be, unpredictable. Anyone who claims to know what lies ahead is simply projecting, but that does not mean you cannot make an educated guess based on previous cycles and data. Understanding this, it is likely safe to assume that even if interest rates begin to rise, the market will stay hot, being a seller’s dream. Then again, we have no idea what tomorrow will bring, and the entire industry could change instantly. So buckle up. If 2021 is a precursor, it will be a wild year. And as Brady said, “there could be a curveball at any time.”