The past few years have been a wild ride in the housing market, with home prices skyrocketing and mortgage interest rates at a historical low. The pandemic had people fleeing big cities and other urban areas for rural towns, flooding the market in places that were ill-prepared for the influx. International buyers stopped nearly completely, yet the expected plunge in buying numbers never materialized. What does this mean for the future? Before making any big decisions, let’s consider what the housing market will look like throughout 2022.
A sellers’ market is here to stay
For the past several years, cities across the United States have seen a sellers’ market when it comes to housing. Historically low mortgage rates and an influx of millennials buying houses have created a demand that far outstrips supply and dives up sale prices. Now, the housing market will balance slightly. The Federal Reserve has indicated mortgage rates will rise slightly this year, likely driving some buyers out of the market.
More homes will pop up
Home prices will rise but not exponentially
According to CoreLogic, home prices in the Naples metro area will likely increase by an average of 3.2%. The increase is not astronomical but instead holding steady – an excellent long-term indicator for the Southwest Florida market. Ultimately, real estate in Naples will remain a solid investment for decades to come.
Smaller cities and suburbs will remain popular
Naples and the surrounding areas, in particular, are likely to attract a good portion of the 2022 buyers. Most are still leaving major cities for smaller ones or the suburbs as they seek a slower pace of life and more space. Due to the increase in people working from home, buyers want more space in their homes, often for home offices and personal gym set-ups. Browse our Neighborhood page to see popular and emerging areas.
The housing market in the Naples metro area will remain steady
While some areas saw massive, sudden influxes of people during COVID-19, Naples wasn’t one of them — and that’s a good thing. Those areas are now seeing the influx happen in reverse as people find a new normal, leaving rural areas to move closer to cities again. Those returning to the office are seeking out shorter commutes, while others want improved access to the outdoors and impressive culinary scenes.
Southwest Florida’s population will continue to grow
A study by the Economic Development Alliance indicates that Southwest Florida has experienced steady population growth at an average rate of roughly 2% per year in the past several years. It’s expected to continue as the Naples area has many desirable attributes buyers are attracted to. Residents enjoy an exciting and varied selection of restaurants, a range of activities and experiences to partake in, including golfing and hiking, a solid school system, fantastic hospitals, and the mild climate, which makes living in the area comfortable year-round. Additionally, Naples’ booming job market is allowing more to justify the move for work reasons, and the diverse demographics — in both age and race — allow everyone to feel welcome in southwest Florida.
International moves will resume
During the pandemic, the majority of international moves were put on hold. However, in 2022, it’s expected that the housing market will see buyers from all over the world again. This is also an area where the housing market will continue to evolve. The pandemic showed home tours and even the entire transaction process can be done remotely. This is a game-changing feature for agents to offer – particularly for international buyers. They will appreciate not having to fly around the world solely to look at properties before moving to a new country.
Millennials have finally entered the market
Millennials, now entering their forties, have long been priced out of the housing market. Between a lack of career options, student debt, and the rising prices of houses, it wasn’t clear if the majority of millennials would ever be able to purchase a home. However, the ability to work from home, the new availability of many jobs, and the aforementioned low mortgage rates have allowed this generation to finally start purchasing homes.
Naples will remain a luxury real estate market
Joining big cities like San Luis Obispo and Kahului, Naples has been ranked one of the top ten luxury housing markets in the country on the Wall Street Journal/Realtors.com Emerging Housing Markets list. People continue to move to the area seeking sun, sand, a relaxed pace, and the luxurious lifestyle only found on the Gulf Coast. Those looking for second homes also appreciate Naples’ extensive golf courses and proximity to other popular vacation destinations.
Luxury homes will continue to be exceedingly popular
The pandemic has driven home to many people just how important it is that your home acts as your sanctuary. With this in mind, an increasing number of buyers are willing to pay more for a luxury home as they seek the upgrades and conveniences which come with it. For sellers, playing up said features — extra space, an upgraded kitchen or bathroom, and comfortable outdoor living areas — are likely to draw in buyers who work from home or are concerned about potential lockdowns.
Looking for Old Naples real estate?
Whether you’re looking at purchasing one of the Port Royal homes for sale or considering selling your Pelican Bay real estate, 2022 will be an excellent year to venture into the housing market. Sellers will benefit from quick sales and higher sales prices, while buyers can still take advantage of lower mortgage rates and new construction that will come available in the latter part of the year. There’s currently no indication of an impending housing market crash, so properties should definitely be considered an excellent way to expand your investment portfolio.