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Our 2022 Real Estate Forecast

2021 was a crazy year to say the least. In real estate, in property management, and in the world in general. Let’s pause for a moment to wrap things up and peak ahead at what the future holds in 2022.

1. Pandemic-related retirement driving moves among older Americans

More than half of U.S. adults retired in the last year. That’s up from 48% in 2020. The uptick can be attributed to the ongoing pandemic. We’re going to continue to see a lot of people moving who are no longer tied to their places of work, and many of them will be moving to sunny Florida.

2. Remote workers are choosing to live in places like Ocala and Tampa, but for very different reasons

Just as the pandemic is driving a wave of retirements, it’s locking in the shift to remote work and simultaneously freeing people up to move to places where they can enjoy warmer weather and get more bang for their real estate buck.

That’s why we think places like Ocala are doing well. Because it’s in the center of the state, Ocala has a quaint, country feel and lots of room to stretch out. People are coming in from the big cities and they’re wanting to spread out and have more land. Marion County, which saw 19.7% growth this year, offers just that.

On the other hand, for a growing city like Tampa, remote workers are deciding to ditch the freezing cold winters of New York and other big northern cities for Downtown Tampa. These homebuyer are relocating to the beautiful Tampa Bay, still working their same job, and trading a high-rise in Tampa for their old one in New York. So they’re going from high rises to other high rises.

With so many incredible things to do in Tampa, it’s fast becoming a favorite city in Florida. But there’s only so much land. They’re knocking down low-rise buildings and building upward, going vertical, and you’re getting more dense, urban-style development, which also protects the surrounding land from over-development.

3. Home prices will continue to rise, but not as drastically

What we’re hearing is that home prices are still going to go up, but not as drastically as they have in the past two years. We’ve gotten out of the frenzy, but we’re still going to see home prices go up. Hopefully the inventory shortage will lessen as supply chain issues start to get worked out.

With the interest rates rising a little bit, it’s going to push some buyers into the rental market. Industry experts predict rental demand will climb for at least the next five years. But don’t worry. Our sister company K&R Property Management can help you find a great rental.

4. Why we think “the frenzy” may be over

We’re starting to see buyer indecision again. To give you an example, we recently spoke to a couple of agents in the Tampa Bay Area because we had someone looking to buy down there, and the client had us call on a couple of houses. The agents in Tampa were all keeping the homes — they were all new construction, and they had just been listed — on the market for a minimum of a week before they reviewed any offers. The reason? They’ve been having a problem with people coming in from out of state, making an offer on the property, and cancelling during the inspection period. In one case, one home had been back on the market four times. During the peak of the frenzy, we didn’t see that kind of indecision among buyers.

Pro tip for realtors: If you get asight-unseen offer, it’s always wise to keep it on the market and get backup offers. And just know it might not make it through the inspection period, because when the prospective buyer goes to see it in person for the first time before the inspection, they might not like it.

5. Realtors and buyers will continue to change the way they negotiate

Realtors changed how they negotiated in 2021. Some buyers skipped the inspection period in order to close the deal on the house they wanted. Are we going to see more of that kind of aggressive competition among buyers?  Perhaps in Tampa with the growth they’ve been experiencing, and maybe even Ocala. In those areas where there’s less than 2% inventory, we may still see the superheated seller’s markets we saw in ’20/’21.

Final thoughts

For sellers, if you put your house on the market in 2022, you’re going to get great money. Going in to buy is going to continue to be a little tougher than in years past, but you have great realtors at Rabell Realty Group. We represent buyers in Saint Augustine, Gainesville, Tampa, Ocala and everywhere in between, and we can help guide you through the process. We’ve done it, we’ve been there, we’ve got great teams working for us, we can all help each other get through this. Give us a call at 352-559-8820 for more information on any of the communities we’ve discussed here.

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