What to expect now and in the coming months for real estate investing

Beth McCandry

2022 is just around the corner and in the real estate world we are wondering if we can expect another year with limited supply and labor shortages. When it comes to real estate investments, accurate market forecasting is essential. This applies to fixer tops as well as to new developments. The question comes up, “Will 2022 be a good year to invest in real estate and what should I consider?”

Cooler temperatures ahead

Experts assume that property values ​​in 2022 will cool down compared to the hot market in the first half of 2021. Investors need to weigh the risk and return associated with investing in this changing climate. According to Realtor.com, we saw a decline in the rate of inflation in both August and September, which was the first consecutive monthly decline in 2021. Positive about this change – this shift can lead to a realignment between supply and demand in the next few months.

Continuous shift to secondary markets

The pandemic continues to affect the migration of residents from core urban areas to secondary markets. This presents an excellent opportunity for real estate investors. For reference, a secondary real estate market typically has a population size between one and five million people and is located near a primary large metropolitan area. These communities and neighborhoods will certainly benefit from the revitalization and must be prepared for the increased demand. Experienced investors and motivated developers can take advantage of these opportunities that are available in different regions of the country.

The rate of home flipping rose in 2021, but profit margins fell. File photo.

Falling profit margins for pinball machines

Home pinball machines should pay close attention to profit margins when deciding whether to renovate and resell homes. The rate of home flipping rose in 2021, but profit margins fell. ATTOM Data’s US Home Flipping Report for the second quarter of 2021 found that 79,733 single-family homes and condos in the US were flipped in the second quarter. That was 4.9% of all home sales in the second quarter and the first increase in over a year. Although the flipping rate increased, profit margins fell to the lowest margins in 10 years.

Developer and new building

Even in this market with all its challenges, there are homeowners who want a new building. If you are a developer this market can be just as difficult. Labor shortages can adversely affect project schedules and skilled workers can be difficult to find. Some developers have reached out to representatives of third-party owners to help them navigate these waters. Simply put, these representatives are an extension of the developer and provide valuable input and expertise in all areas of the process while adhering to the project schedule and budget. As a developer, it’s important to weigh the pros and cons in building this relationship.

Currently, sellers find themselves in a more convenient position than buyers. Investors will benefit from keeping a close eye on these trends. There is some talk that the market has adjusted to buyers in the coming months due to a realignment of supply and demand. According to Nasdaq.com, real estate investors, home sellers, and even fix-and-pinball machines should benefit from some higher returns when it comes to selling.

Bash & Co. Sotheby’s International Realty is an innovative, full service residential real estate agent using the latest technology to serve clients in emerging, established and luxury neighborhoods in the Kansas City area. Follow them here on Instagram and here on Facebook.