The Agency Red Paper 2022 Annual Market Report
It’s here! The Agency has released its third annual Red Paper, an extensive market report compiled of the latest data, research and insights on real estate market performance throughout the U.S., Canada, Mexico, the Caribbean and Europe in 2022. The Agency’s Red Paper examines the real estate activity in the more than 60 markets the brokerage serves and reveals shifts in home-buying trends, buyer demographics, home design and more.
“In preparing our annual Red Paper and with the softening of the global real estate market, the rebalancing theme resonated across our global offices. While some equilibrium has returned to the market, we can all agree we’re still far from anything economists would call ‘normal.’ However, one fact is clear: housing remains a primary investment for the world’s most affluent citizens and a safe hedge against inflation,” said Mauricio Umansky, CEO and Founder of The Agency. “Our 2022 Red Paper dives deep, examining where the housing market is headed in 2023, ultimately revealing that the luxury market is strong and there is much wealth to be distributed across markets and generations.”
The Red Paper showcases significant market trends, the rising popularity of several metropolitan cities in the U.S. and beyond, and confirms the old adage that in life—and in real estate—the only constant is change. With unprecedented market activity in 2020 and 2021, the second half of 2022 saw a shift away from the unsustainable pace of the last two-and-a-half years. Volume dropped while the industry’s cyclical nature and historical seasonality quickly returned. This shift was the beginning of a rebalancing act.
”When compiling our Red Paper findings, 2022 proved what we already knew: no algorithm or impersonal approach can compete with the hyper-focused local expertise of a quality real estate agent, and at The Agency, quality over quantity is the only way we know,” said Rainy Hake Austin, President of The Agency. “Everything we do is in service to our agents and their clients, whether we’re unveiling a new tool, enhancing our service structure or forging new partnerships. Our focus is to fuel our agents’ knowledge, build their businesses, and ease the transaction process for buyers and sellers across the globe.”
6 Highlights from The Agency’s Red Paper:
The Rental Market Was Hot—With mortgage rates staying high, many opted to rent instead of buy, leading to a highly competitive rental market. As interest rates rose, buyers hesitated more, and many sellers opted to pull listings from the market. Transactions began to slow, but with demand for housing still high, would-be buyers turned to short- and long-term leases.
Inventory is Still Catching Up to Demand—Rebalancing is in progress, with some sellers still on the fence about listing and developers sprinting to bring more inventory onto the market. Where it was possible, developers capitalized on the market’s lack of inventory. Anxious to lock down properties in their dream destinations, buyers purchased homes pre-construction, willing to wait a year or more for a tropical retreat to call their own.
Second Homes First—The younger generation buys much differently: Many are snapping up what would be considered their “second homes” first, using them as investment properties. This contrasts with older generations who tend to buy secondary residences for lifestyle purposes, often choosing to spend more time away from their primary residences thanks to the flexibility of remote work. And with the U.S. dollar remaining strong, buyers will continue looking overseas for their next purchase, from Mexico to Canada and Europe to Asia.
Amenitized Living Stayed a Priority—All the bells and whistles that buyers sought out during the pandemic? Well, we still love them. Amenity trends, from pools to sports courts, held strong.
New Development Was Bustling—Major metro and suburban markets saw a large number of new development projects in an effort to rebalance the marketplace with fresh inventory.
Remote Workers are Still Driving Demand—No office? No problem. As many maintain their remote work lifestyle, permanent relocation to traditionally seasonal—and scenic—markets continued, including increased migration to San Miguel De Allende, Mexico, Palm Springs, California, and Miami, Florida.
Read The Red Paper in its entirety, including our regional market spotlights, here.