Brian Buffini’s Bold Predictions
In today’s competitive and challenging marketplace, real estate professionals need to understand what’s driving the market and where the trends are headed so they can be prepared for what’s coming next. In my 15th Bold Predictions broadcast, featuring an exclusive interview with Dr. Lawrence Yun, Chief Economist at the National Association of REALTORS®, I predicted what’s in store for real estate in 2022. Over the years, I’ve given 33 market predictions, and 31 of them have come to pass! Here are some of this year’s major takeaways:
Demand is still huge
There is still enormous demand for people to become homeowners. According to NAR, first-time buyers made up 34% of all homebuyers in 2021, an increase from last year’s 31%. Interestingly, 11% of purchases were multi-generational homes, with people pooling their resources and buying bigger houses so that multiple generations of one family could live in the same property.
The market is still hot
Houses are still selling in record time, with very fast closings. Buyers are typically purchasing their homes for the full asking price, with 29% paying even more. For multiple consecutive years, there’s been falling inventory, but it looks like we’re finally turning that corner. The great news is that Dr. Yun says we’re beginning to see something of a mini surge, which means that this autumn and winter could be the second best in 15 years.
Higher mortgage rates and rising inflation
Dr. Yun says the Federal Reserve has clearly signaled that the days of loose monetary policy are coming to an end, which means higher mortgage rates. Furthermore, at some point next year, short-term interest rates will rise, which will filter up into mortgage rates too, possibly reducing sales activity by about 2%. At the top end of the market, people will buy property as a hedge against inflation, purchasing second and even third homes. Others will find that rising inflation will impact their pocketbooks and their ability to qualify.
NAR’s membership is now at a record high of over 1.5 million. With varying degrees of skill, some of these folks will do very well, while many others will be extremely challenged. To truly succeed and build a business that lasts, agents need to be more professional and expertly trained than ever before. That’s why the Buffini & Company 100 Days to Greatness program®, in partnership with NAR, is vital for new agents or those making less than $100,000 a year.
Change is coming
The real estate business is hot right now but, as the old saying goes, even a turkey can fly in a hurricane. When the wind starts to slow down, you’ve got to know how to fly. The winter and summer are going to be as busy as you’ve ever experienced, but it’s not always going to be a runaway market. You need to work hard, focus on the fundamentals, invest some and put some away. Do this and you’ll be able to take advantage of the year and put your business in a position to prosper coming out of the end of this market too.
To learn more about standing out amongst the competition and getting ready for what 2022 has in store, listen to the latest episode of “It’s a Good Life.”