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.

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.

Additionally, as the pandemic winds to an end, moves that have been put on hold will likely occur. People will move for new job opportunities as offices reopen and life begins to return to normal. There’s also the factor that people are feeling a fair amount of economic uncertainty, and one secure way to leverage money is by investing in real estate. All of this indicates the housing market will stay strong throughout this year.

In the past few years, houses went from taking an average of nearly three months to sell to only 24 days, and this impressive trend is likely to continue. Homeowners can count on their homes selling quickly, and buyers should be prepared to move rapidly when they find a property they love. Looking to buy in Naples now? Browse our Featured Listings.

 

In October of 2021, the potential construction of over one thousand new homes was approved in Southwest Florida. The construction projects may take more time than expected due to supply chain delays and higher tariffs. Nevertheless, even the potential of new construction is likely to catch the attention of potential buyers, and many properties may sell in advance of being built. The bulk of buyers right now will be drawn to the new homes, as they can be sure the properties are move-in ready and won’t require extensive and expensive work.

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.

 

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.

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.

Naples, however, didn’t see this massive influx, instead only noting steady growth. As people resume their everyday lives, Southwest Florida is likely to avoid an exodus and maintain the strong housing market it has enjoyed in recent years.

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.

The Gulf Coast of Florida is a favored hot spot, and it’s not hard to see why. People who prefer an active lifestyle can take advantage of the year-round temperate weather to go on beautiful hikes through nature preserves, go sailing on brilliant blue water, and hit the beach. Others may prefer to visit the numerous art galleries in the area, go shopping at the small boutique shops along the waterfront, or attend the plays at the local theaters. There’s also plenty of history to explore in the area, and other popular destinations like Miami, the Keys, or even Orlando and Tampa are all within driving distance.

 

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, 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.

Millennials are drawn to single-family houses which provide some privacy and in areas outside the major metro cities where housing costs are comparatively lower. They seek homes featuring extra square footage since most are or want to be working remotely and will need office space. Additionally, a significant number of millennials are co-buying homes with friends, so it’s crucial there be enough space for multiple people to live comfortably. Promoting these features will see homes sell faster as they will attract the millennial client.

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.

 

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.

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.

If you want to learn more about luxury housing in Naples and discuss your options for your home with a Naples realtor, reach out to Griffin and Forbis.


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