The real estate market has been quite hot in 2021. That’s because the pandemic ignited a home-buying frenzy for many individuals. This is greatly attributed to the low mortgage rates with historic decade-long housing shortages and shifting working dynamics.
Thanks to these changes in the real estate market, there are many emerging opportunities for young people to make their dreams come true by purchasing their first homes. The Chicago real estate market isn’t very different from other states across the country. But with the end of 2021, many new changes are expected in the real estate market.
Below are six things you should know about the Chicago real estate industry come 2022:
1. The Work-From-Home Culture Will Change How People Buy Homes
There are many changes in how we conduct our daily lives that are attributed to the COVID-19 Pandemic. Fortunately, the pandemic will also change how people in Chicago shop for homes. There will be numerous changes in buyer preferences.
This means many people will need more than the standard home with additional office space to work from. Thanks to remote working conditions, buyers will rethink their decisions to purchase properties near public transits.
If you don’t need to commute to and from work every day, there is no need to live near the train station or a major road. Hence, more people will purchase properties in neighborhoods away from the city. This not only gives you more property options, but it also helps you purchase property in the most amazing neighborhoods away from the hassle of the city.
2. There Will Be an Increased Demand for Second Homes
In 2021, there was a 27% increase in demand for second homes. This trend will likely continue to 2022, with more people looking to purchase second homes. This is because flexibility and additional space have become quite important to buyers.
Today, buyers aren’t just looking for a house with more space; most prefer buying a house in a different neighborhood entirely. This is because most homeowners are looking for a second source of income from these houses. With a second home, buyers have more income options such as renting out the house
Some individuals even buy properties such as cabins, downtown condos, and lake homes for short-term rental.
3. People Are Evaluating Their Property Choices
While the current trends show more people moving to the city from the suburbs, there is also a smaller percentage of people moving to the suburbs. Fortunately, there is more home selling and buying activity all around. And after several years of stagnation in the industry, Chicago real estate agents are now seeing some changes, and more action is coming to the state.
Thanks to the pandemic, people are now reevaluating their choices in investment properties, homes, and how they live. Whether you’re looking to buy rehab homes for sale or looking for a flip and fix the property, 2022 will likely change how we shop and buy properties.
Families will discuss where they want to live and what type of property will likely accommodate their new lifestyle. Some of these changes involve finding a home with more office space to accommodate the working people in the family.
On the other hand, some people are considering moving to the city to be around more people to avoid the lonely life of the suburbs. As people slowly settle into post-pandemic life, they are reevaluating their new desires and dreams.
Thankfully, the Chicago real estate market is quite balanced. Come 2022; you will experience a constant flow of individuals moving between suburban communities, city neighborhoods, and downtown for work, lifestyle, and family purposes. Most of the suburbs in Chicago are less than an hour from downtown, giving Chicago people the flexibility to choose where to work and live.
4. Mortgage Loan Interest Rates Will Likely Increase in 2022
According to the Mortgage Bankers Association, home loan interest rates are likely to increase gradually from the beginning of 2022. However, it’s predicted that the overall home-buying environment will likely remain favorable for new and old buyers. That’s because the interest rates will likely remain historically lower and more favorable to buyers despite the increase.
The real estate industry can’t function with skyrocketing interest rates. As the year passes, supply chain issues in building material industries will likely reduce and ease up.
Thanks to these changes, builders will increase their pace and reduce construction time by half. This is good news for people who could not purchase properties in 2021 due to the escalated costs related to construction.
5. Increase in Governmental Regulatory Efforts in Rental Properties
Thanks to the pandemic, many governments focused on housing affordability in their countries. For years, rental property affordability has been a major source of concern for the U.S. government. And after the tumultuous time in the rental housing market during the pandemic, there will likely be a national-level increase in regulatory efforts.
The government is likely to push rent control policies as a quick solution to preserve affordable housing. Unfortunately, this move is likely to be disputed greatly by economists across the country. Other industries may also experience an increase in regulatory efforts thanks to the pandemic-induced evictions seen countrywide in 2020 and 2021.
6. More Resources Will Be Allocated to Technology in the Industry
In 2022 we are likely to see shifts in the Chicago real estate market. With this in mind, it’s predicted that additional resources will be allocated to mortgage technology. With lower profit margins, most lenders are likely to look for ways to reduce the cost of originating a loan.
The GSEs are likely to start focusing more on mortgage tech. Some of these techs will be from previous administrations that lost focus. The main purpose of this shift is to de-risk the lenders and move them out of conservatorship.
Now You Know What Trends to Expect in the Chicago Real Estate Industry in 2022
There are numerous changes that buyers, sellers, and real estate agents should expect in the Chicago real estate market in 2022. Most of these changes are an aftereffect of the pandemic and how people settle into the post-COVID world. Fortunately, there are many great things to anticipate if you’re looking to buy your first home.
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