Over here at 7 Figure Flipping, we like to look at the real estate market by looking at the larger economy and what we anticipate to be emerging trends in 2022. Then we look at what skills you might need to cultivate now, if you are just starting your real estate business, to prepare for the upcoming market.
In order to predict possible trends, we have to examine where the market has been the past few years. When we look back the pandemic contributed greatly to market trends by controlling supply chain issues and therefore keeping supply low as the demand for housing went up. We still see a major demand issue for real estate with a small supply.
We made our predictions based on what we feel is the biggest driving factor in the economy, and that is the customer/consumer feel. Real estate is one thing and macroeconomics are what drives everything. Does the current consumer feel flush with cash or do they feel like they don’t have any money?
A great way to observe consumer ‘feel’ is to watch the job market. How are people looking for jobs? Right now we are seeing trends of people shopping around, asking for higher wages, and taking their time choosing a job because it is an employee’s market.
What that says to us is the consumer feels like they have money and therefore are not motivated by fear to save their money or immediately secure getting more of it. In the middle and upper classes specifically, it feels like the money is there, people feel secure.
Is this going to hold in 2022?
- Interest rates are about to increase
There is going to be some backlash on increased interest rates and inflation. Inflation will start to go up while income does not and people are going to see and feel their money not going as far.
- There will be a decrease in the stock market
When inflation happens and interest rates increase, people will experience some fear and start adjusting their stock market portfolio to fit the feeling of uncertainty, of not having as much money. Though we don’t think the stock market will crash, it will dip. When people are scared they don’t spend as much money.
- The real estate market will level off to a slow growth
We have seen a hike in real estate prices and it has been a steep and linear climb. What we think we will see is not a decline but more of a leveling off in the pricing so the growth will not be as steadily upward. Prices will increase but more slowly.
If you want to get into real estate, what does this mean for you?
Here at 7 Figure Flipping we are not fear based and we know there are ways to make money in any market. You just have to find where you fit in the current or coming market according to your skill set.
If the stock market goes down in 2022, it is a great place and time for a slow growth real estate market. It may be the ideal moment to get investors pulling out of the stock market interested in more tangible, stable assets such as homes. In order to get those investors, you need to be an expert in the real estate market.
Our question is this, how are you positioning yourself to understand the business of the real estate market and become an expert?
If you want to set yourself up to be the expert later in the year when the expert is needed, you need to start your education now. One of the greatest ways to become an expert is through experience.
And it’s up to you to go out there and get it.
To find out more ways we can help you get started and take action, and as always for more tips and knowledge on real estate, check out our 7FigureFlipping podcast.