Following a frenzied year for the real estate market in the midst of the COVID-19 pandemic, double-digit price increases are slowly dropping to normal rates, though an unusual market persists in the aftermath of 2020 according to Paul Tostevin, director for Savills World Research.
While the market is still hot, up-and-coming cities are bouncing back stronger than ever, especially those which provide amenities like health, outdoor space, and community access post-pandemic.
“Small cities have come out as places that can offer those things quite well,” Mr. Tostevin said. “They make it easy to nip into the office when needed, with cheaper living accommodations. We’ve seen that translate into price growth.”
“We do expect to see double-digit price growth continue throughout 2021 and into 2022,” said Molly Boesel, principal economist, CoreLogic. “There’s really short supply, and really high demand. Later in 2022 we do expect price growth to slow to about a 2% or 3% annual growth rate.”
There’s one significant difference between the market in 2020 versus 2021 and 2022: As travel restrictions ease up around the globe, international investors are expected to get off the sidelines and back into the market.
“During the pandemic, we hadn’t seen a lot of inbound investment into U.S. real estate,” Ms. Yiannoulis-Riva said. “As restrictions lift, we’re going to see that come back in a very big way.”