2022 real estate steering factors
What are the factors that will shape Lowcountry real estate sales in 2022 ? Here are our thoughts on what will be most impactful in the months ahead :
INVENTORY LEVELS
We ’ ve all heard ( or said ourselves ) the following : “ I ’ d sell in a heartbeat , but then I ’ d have no place to go !” Such is the vicious cycle of our low inventory challenge , and we expect it to continue further into 2022 . It would seemingly take some dramatic / significant event to turn content homeowners into sellers , and we do not have any basis to predict this happening anytime soon or in any dramatic fashion . As such , we expect inventory to
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Meaghan Beck Listings Manager Licensed SC Real Estate Agent
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Taylor Brunn Closings Coordinator Licensed SC Real Estate Agent
remain low , which generally sets up to favor sellers for the foreseeable future .
COVID
The sharp spike in Omicron cases in January across the country ( and Lowcountry , of course ) caused widespread disruptions in the real estate cycle for the market kick-off in 2022 . These disruptions are expected to be short-term , while the bigger factor is what we might see in early Spring . If COVID cases settle dramatically , we may arrive in a new era of confidence and enthusiasm that could fuel a new wave of buyer and seller activity . Conversely , others have renewed their own interest in calling the
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Wendy Sanders Team Support Specialist
Gail Bonnett Client for Life Coordinator
Carrie Collins Staging and Interiors Specialist
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Lowcountry home , resulting in an increased level of property retention and a corresponding decreased level of property turnover . At the same time , rising property values , downsizing / simplifying , and general changes in housing needs are certain to fuel a much-needed level of new listings in the first two quarters of 2022 . Therefore , inventory is shaping up to be the key steering factor in how the 2021 real estate market unfolds .
INTEREST RATES
While we are not expecting any drastic increases in mortgage interest rates , we are pretty confident that rates will climb in 2022 . In fact , indications here are the start of the year are that second home rates may experience a bump as early as April 2022 . Since rates will still be historically low and extremely attractive , the challenge isn ’ t the rates themselves , rather the increase in rates as real estate values have climbed so significantly . The net-effect is reduced affordability as the borrowed-dollar doesn ’ t buy as much real estate as it once did , while some buyers ( especially first-time homebuyers ) need all the buying-power they can get .
REMOTE WORKPLACE
Work From Home ( WFH ) is here to stay for a certain percentage / segment of companies , as workers desire autonomy , flexibility , and the opportunity to relocate to a more desirable location to meet their work obligations remotely . As such , we continue to see more and more people move to the Lowcountry where they can significantly enhance their quality of life ( weather , natural amenities , year-round activities , etc .) in their WFH mode . This movement is additionally fueled by “ life is short ” and “ why wait ” mentalities that are compelling accelerated purchase timelines among those who may have been waiting to move upon retirement .
RELATIVE VALUE
While we have all been impressed with the sharp increase in real estate values locally , we are not nearly unique in that vein as values have jumped dramatically across the country . The Hilton Head / Bluffton marketplace has long-since been a relative “ value ” in comparison to other coastal communities , and it still is . We expect this to continue to drive additional interest among buyer prospects , especially those who are selling high in areas like New York and California , only to buy here in the Lowcountry , feeling like they hit the lottery .
BUBBLE WORRIES
The old adage of “ what goes up must come down ” has some homeowners wondering just how high values can realistically climb before they peak and perhaps begin to decline . Most folks like the idea of buying low and selling high , so we expect that some segment of owners will enter the marketplace this year amid concerns that values may be at , or near , the top . Meanwhile , other sellers are choosing to enter the market more so on an “ opportunistic ” basis … they ’ ll sell if , and only if , the market delivers a hefty price for their home . In either case , inventory is welcomed ( and needed ) in the coming months , and we expect sellers will continue to experience ( and enjoy ) a very favorable market for months to come .
COST OF LIVING
Supply chain challenges , inflation , and labor shortages are just a few factors shaping the current cost of living , and it seems clear that these won ’ t be corrected in any short order . These directly impact not only our individual purchases and expenses , but also those of our service / maintenance / construction providers , who have no choice but to pass those costs along to the consumer , forcing the cost of home ownership to rise . Adding to this , on another front , we are watching with anticipation what the effect of Flood 2.0 ( FEMA ’ s new flood insurance rating program starting with policies in 2022 ) will have on the cost of flood insurance in our area . In some cases , the premium increases will be significant , which could possibly sway buyer ( and seller ) decisions in the months and years ahead .
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