Steve Haddadin weighs in on the Real Estate Market Crash.

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Steve Haddadin weighs in on the Real Estate Market Crash.

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Concerns have been raised as housing prices have risen dramatically in the last year, inflation is looming, and several interest rate hikes are expected in 2022 and 2023.

The pandemic sparked an unprecedented home-buying frenzy, fueled by a lack of housing supply and historically low mortgage rates.

Here are Steve Haddadin’s 2022 predictions.

It is expected that inventory will remain low.

Although it may sound cliched, the real estate market is primarily driven by supply and demand.

There is currently insufficient housing supply to meet the demand.

When demand is met or the economy is struggling, prices fall.

We will continue to see new home construction fall short of demand, particularly given the ongoing supply chain issues and labor shortages.

We will continue to see record-high sale prices despite rising interest rates.

According to Redfin, 54% of homes sold for more than their asking price in 2021.

We expect housing price growth to continue as inventory remains low compared to historical trends and demand dries up.

According to Freddie Mac, the United States had a 3.8 million-unit housing supply shortage in the fourth quarter of 2020.

As long as supply continues to lag behind rising demand, housing prices will continue to rise.

An increase in millennial buyers has led to a more diverse buyer demographic.

Millennial demand will keep the market competitive and prolong the buying frenzy seen throughout the pandemic, despite projected mortgage rate hikes being a source of concern for home buyers.

As we’ve seen with changing workplace dynamics and work from home, new opportunities for young buyers to pursue their first homes are emerging, as living close to the office is no longer an issue.

Baby boomers want to downsize, while millennials want to buy their first home.

Inflation is the increase in the price of goods and services

One of the concerns raised is that the rise in the CPI (Consumer Price Index) will result in a loss of purchasing power.

Real estate has historically proven to be a good inflation hedge.

Inflation was particularly high in the 1970s, when the CPI averaged 7.1 percent per year and housing prices were at an all-time high.

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