Properties with double-digit percentage appreciation, historic low interest rates and the growth of the economic confidence index are indications that 2021 was an extremely positive year for the property market.

What about the real estate market in 2022? What should buyers, sellers and real estate brokers expect from the market for next year?

According to research conducted by large companies linked to the real estate sector and contributions from some economists and analysts, the real estate market will continue to grow in 2022.

But where is it going to grow? How should buyers, sellers and investors analyse the real estate sector with a focus on making the best choices and closing the best deals?

To answer all these questions and help you plan your next real estate investment, we present the forecasts for the Florida real estate market in 2022.

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Florida real estate market growth in 2022.

Many people, during the height of the coronavirus pandemic, bet on a recession in the property market in 2020.

But the opposite happened, there was an unexpected boom in real estate demand, which had not happened since 2006.

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The fact that the housing sector has seen unexpected growth during a period of uncertainty shows how the housing market has evolved.

And from this evolution we can expect that the cost of construction will fall a little bit, because a big part of the problem with low inventory in the new construction segment was the high cost of production.

There is a problem of inflation, albeit short term, affecting the manufacturing industry.

This has increased the prices of building materials for homes and even cars.

Lumber prices alone added about $36,000 to new home prices.

In the 2022 housing market, bottlenecks in the supply chain will be corrected with continued economic growth, and many companies will replenish their inventories.

It is important to bear in mind that this factor will not reduce the value of property, but rather prevent constant price rises.

Buyers who left the market for not keeping up with the high prices and especially the bidding disputes are waiting for 2022 to resume negotiations.

Another important factor that reinforces the real estate market growth forecast is the economic growth forecast.

The rise that began in the third quarter of 2020 is expected to continue into 2022. The Federal Reserve's forecast for real economic growth for 2022 is 3.3%.

8 Forecasts for Florida's real estate market in 2022.

1 - Comparatively higher interest rates.

Compared to the rate of 2.66% observed from December 2020 to January 2021, we will see interest rates increase in 2022.

Buyers attracted only by low mortgage rates, the reality for many Americans, may have to take a step back.

But it will not be an absurd increase, and inviting rates are expected, especially for foreigners who want to invest in the United States.

The increase in interest rates will create a small dampening effect on demand and the forecast is that by the last quarter of 2022 it could reach 3.8%.  

2 - Property prices remain high.

The market forecast presented by Zillow believes house prices will rise 11.8% by April 2022.

House prices are expected to continue appreciating at a historically high rate during the first quarter.

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But this rise in prices should decelerate from the second quarter, remaining stable throughout the year.

It is important to highlight that there is no prediction, not even by the least optimistic, that prices will fall.

Many believe in a break-even point, but not below what we already see today.

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3 - Increase in residential construction.

The National Association of Home Builders (NAHB) Builder Sentiment measures how builders view the housing market in terms of how much demand there is currently for new homes and how much demand is expected in the future.

A score above 50 indicates a favourable outlook for residential sales as the availability of new homes is low.

In April and May 2021, builders' confidence remained steady at 83, which is due to the problems of prices and shortages of building materials.

However, as the prices of some building materials stabilise in 2022 and builders follow through with new home projects, we may see new builds being undertaken and made available on the market.

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4 - Moving to small towns supported by affordability concerns and remote working. 

Small towns are where property prices are in the price range of most buyers.

And demand for these locations will continue to rise in the face of new homebuyer needs.

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People want to live in properties with more space and with outdoor spaces close to their homes.

With remote working firmly established not as a passing trend but as an increasingly common practice, professionals from a range of sectors can explore more options for cities to live in.

And the vast majority have chosen to live far from large urban centres.

As demand changes, small towns will become much more competitive, leading to property appreciation.

5 - Increased demand for outdoor amenities.

Properties with outdoor amenities generate higher rates on rental websites, whether those properties are short-term rentals or for monthly rentals.

This shows that people are more interested in spending time outdoors.

Property owners who prioritise high occupancy and long-term appreciation may want to invest in outdoor barbecue facilities, children's playground, exercise rooms, garden areas with benches and lush green landscaping.

Florida is the ideal place for this, where the climate is pleasant all year round.

Residents and tourists love spending time outside to socialise and enjoy the fresh air.

And yes, many will have more free time with the current trend of working from home and even travelling outside of the holiday period as they can carry out work from anywhere.

6 - Multigenerational properties will prosper extremely.

The market for single-family homes has grown in the year 2021, but the home model that promises to be the big preference of both builders and investors is multi-generational homes.

The architecture of this property is designed to accommodate people of different ages in the same building, so that the natural differences between generations are mitigated.

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The great advantage of living in a multigenerational house is the opportunity to live as a family, among members of different ages, where none of the members have restrictions or their intimacy invaded.

However, even though they were created to serve members of the same family, of different ages, but who wish to live closer together, sharing the daily conviviality, multigenerational houses can also be used as a source of income.

The attached room characteristic of this type of house can be rented out and generate an extra income or the property can be rented for a higher value for having this special room.

7 - Rent growth.

Rental prices will continue to grow in 2022, outpacing the growth rates of residential values.

As expected, landlords want to recoup the gains lost from the eviction moratorium extended for more than 12 months during the pandemic.

Currently, rental prices year on year are growing at a comparatively lower rate compared to house appreciation, leading experts to conclude that renting is still more profitable than buying.

If house price appreciation slows down in 2022,rental prices may continue to grow, which becomes an excellent business for property owners who want to profit from monthly rentals.

As house prices remain stable but at high levels, interest rates rise and purchasing power becomes a problem for those dreaming of buying their own property, the demand for renting will increase.

There is a projected 6% increase in net rent for next year.

8 - Market of vacation home. What to expect?

If there is one product in the Florida real estate market that surprised in 2021 it was holiday homes.

With mobility impeded, tourist attractions temporarily closed and international flights unable to be received because of the pandemic, many experts believed that holiday homes would not be occupied and many owners would decide to put their properties up for sale.

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But to the surprise of many and the confirmation of the economic power of this product, the occupancy rates in the holiday homes in Orlando and region were very high.

Record numbers were reached and after domestic travel became possible, the preference of many American tourists was to stay in holiday homes in Florida.

With the announcement of the opening of borders for international flights from countries in Europe and Brazil, for example, expectations are even more exciting.  

All the tourists who were these months unable to travel to Florida will come in droves.

Not least, it is expected that in the coming years there will be no off-season in Florida.

All the pent-up world demand for travellers, will visit Florida, moving even more tourism and consequently the holiday home rental market.

The Florida real estate market forecasts for 2022 bring good prospects for those looking to invest in the United States and dollarise their assets with a safe and profitable investment.

Make 2022 your big year. Invest in the Florida real estate market.

And for that, you can count on the quality advice of the best real estate agency in Florida, specialized in Brazilian investors.

Contact Selecta Realty.

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