Most economists agree that there will be at least another three to five years of growth in real estate across the United States. And although the year will end strong, inventory remains in short supply throughout the country. There are a variety of factors impacting that, but key among them is the increased number of people entering the housing market.
READ ALSO: Residential real estate trends to watch in 2022
According to Gary Nelson of Realty Executives in Flagstaff and the Arizona REALTORS 2022 president, although builders are responding to the demand and putting more product in the market, “the U.S. failed to adequately prepare for the Millennial generation entering the housing market and we are dreadfully low on inventory as a result.”
“Here in Arizona, as people move in and out of the area and we see more and more of the Baby Boomer generation retiring, our hope is that primary homes, investment properties and vacation homes will slowly enter the market.”
Added to the mix are the influx of “instant buyers” or iBuyers, purchasing residential properties directly from private sellers, bypassing the professional REALTOR, and often paying cash at a higher price than market value.
Based in Tucson, Eric Gibbs, Sr, Arizona REALTORS 2022 president-elect, says these iBuyers will remain a threat in the coming year. “iBuyers may drive up the prices in certain communities, making it difficult for some buyers to qualify for a loan.”
Determining where the real estate market is going from here can be difficult. And some assumptions should be made, including that there is no unforeseen economic disaster in the next several years.
“The U.S. real estate market survived 9-11 and continues to weather the COVID-19 impacts,” said Nelson. “The only negative effect we have seen in real estate markets in the past 30 or so years is the Great Recession which lasted from 2007 through 2011.”