Summit Sotheby’s International Realty’s 2022 Market Outlook

According to Sotheby's, amid the pandemic two markets saw increased demand: resort and second-home. Photo: Summit Sotheby’s International Realty.

PARK CITY, Utah – In Summit Sotheby’s International Realty’s 2022 Luxury Outlook, we explore the data as well as experts’ opinions to forecast the trends likely to shape this year and beyond across the world’s prime housing markets.

The end of last year showed signs of a slight shift in the frenzied market of 2021–including fewer bids on houses and homes spending a little longer on the market. But a true buyer’s market isn’t likely, as people continue to move, and real estate is considered a hotter investment than ever. Plus, there are two major issues keeping the market on the side of sellers: low inventory and material supply slowdowns. As such, most experts predict prices will increase throughout 2022, especially after the slower winter months.

As borders reopen, pent-up demand from international buyers will compete for limited inventory with local buyers. That might spell good news for financial capitals like New York City and London. As such, we’ll look into the future of big cities–many of which bounced back more quickly than expected post-Covid lockdowns–as well as how the market is likely to shape up in second-home locations and suburbs which saw prices skyrocket due to pandemic-related migration patterns.

But if 2020 and 2021 were fueled by remote work, we’re predicting that in 2022 hybrid work is likely to drive the market, with many looking for larger homes that can accommodate remote work yet remain within commuting distance to their office. We also explore areas around the world poised for tax changes that may influence buyers’ real estate investment plans.

Millennials are changing the market, too, finally giving up their rentals and buying homes–often with money passed down by their parents. Tech companies–many of which have relocated, expanded their headquarters, or are planning to do so–are affecting the migration patterns of these millennials (and Gen Z, t00).

In fact, the strength of secondary and tertiary cities (now often tech hubs) is one of the trends we’re exploring, in addition to the popularity of serviced apartments and branded developments as low-maintenance homes; the increased popularity of eco-conscious house buying (think solar energy and electric-car chargers), and even the emergence of cryptocurrency, which is still in nascent stages with regards to buying and selling property, but likely not for long.

Finally, we’re diving into some luxury lifestyle trends. From wine to NFT’s to handbags to sneakers, more high-net-worth individuals of all ages–many new to the auction world–are looking to put their money into assets they can enjoy now, with hopes of appreciating value over time.

Written by A. Bradley Nelson, Sotheby’s International Realty’s Chief Marketing Officer for the Luxury Outlook.

For much more in-depth information on 2022’s market trends, read the Luxury Outlook. Below you’ll find an excerpt of one of many articles that will inform real estate intrigued shoppers and buyers:

Amid Inflation And Relatively Low Interest Rates, Luxury Real Estate Remains A Trusted Investment:

“We don’t think the current pace of home-price growth, at least in the aggregate, is sustainable,” says Joel Kan, associate vice president of economic and industry forecast, the Mortgage Broker’s Association.

Still, as inflation rates rise and developed markets continue to debase their currency, luxury real estate could be an attractive hedge and a way to get out of paper money, says Jonathan Woloshin, head of real estate and financials research UBS Wealth Management. With experts predicting the 10-year Treasury yield won’t surpass 3% by the end of 2022, real estate may become even more attractive.

“If you look over the course of decades and centuries, luxury real estate—with all its ups and downs—has held value and even grown in value,” Woloshin says.