Predictions for 2022: Expect more of the same in luxury market

Local experts predict the 2022 market will look a lot like it has — high prices and high demand for the region’s best homes

By Joan D. Warren
Posted 12/18/21

While the pandemic has wreaked havoc on many industries, it’s been a catalyst for the luxury real estate market. Demand and prices soared in 2020, and they continued soaring in 2021.

Will it …

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Predictions for 2022: Expect more of the same in luxury market

Local experts predict the 2022 market will look a lot like it has — high prices and high demand for the region’s best homes

Posted

While the pandemic has wreaked havoc on many industries, it’s been a catalyst for the luxury real estate market. Demand and prices soared in 2020, and they continued soaring in 2021.

Will it continue in 2022?

Some local experts believe not much will change next year. There may be a slowdown in the demand from out-of-state buyers, but all the other factors — low mortgage rates, high demand for the beautiful regions of the East Bay and Southcoast, increased savings, and a shortage of inventory — will fuel a very similar market in 2022.

David Coleman, office manager at Mott & Chace Sotheby’s International Realty, and a real estate professional in business for more than 40 years, believes the local market will not change much in 2022.

“I think indicators are that inventory will stay low, but so will interest rates. One of the biggest impacts we’ve had on the market has been the interest, not only from out-of-town buyers, but from out of state buyers. Homes that have been updated always seem to get immediate interest, with multiple offers, and homes that haven’t been updated tend to stay on the market a bit longer, as buyers are hesitant to do a project with today’s construction costs — never mind trying to find a contractor.”

Buyers from other states accounted for 24.8 percent of total residential sales in Rhode Island in the second quarter of 2021, but the rates were even higher — more than 31 percent — in Bristol and Newport counties. Most buyers are coming from Massachusetts, New York and Connecticut. In the luxury market, buyers from outside of Rhode Island accounted for half of all properties sold for $1 million or more. Coastal markets saw an even higher influx of out-of-state buyers.

Price drives interest

Lisa Schryver and Elizabeth Kirk of the Kirk Schryver Team at Residential Properties are similarly optimistic about the coming year.
“We feel the East Bay market will continue to be strong across all price points — especially if the property is in good condition, a desirable location and is priced accurately,” Kirk said. “The properties we see sitting are those that are priced too aggressively, even for this strong market. ‘The less you ask, the more you get,’ holds very true. An accurate price brings buyers. While we don’t believe prices will continue to accelerate as they have been — almost 20 percent increases in Rhode Island, which marks the second-highest in all of New England — we do believe our market will continue to see multiple offers and faster sales.”
The East Bay offers a lifestyle that is incredibly appealing, especially to people coming from larger, more expensive markets, she said.
“It always comes down to location, condition and price,” Schryver said. “Recently we listed 6 College Lane in Barrington for $649,000 and had 19 showings on Saturday and eight offers by the Sunday deadline. The house was recently renovated, and my clients have exquisite taste and the home showed beautifully. All the potential buyers loved the layout, large yard and thoughtful updates. A listing in this condition in this price point is a rarity in Barrington.”

No ‘bubble’ in sight

“2022 will present another strong year for our local housing market,” said Jennifer Mello, broker with The Mello Group. “Although inventory has started to rise slowly, it is not enough to fulfill the needs of our local buying demands. This fact, paired with low interest rates and increased buyer activity for resale inventory, will keep things moving at a steady pace and high level.”

Mello sees more of the same for 2022.

“Although values may not increase at the same peak growth rates experienced in 2021, I don’t believe that a ‘bubble’ will pop, and all that has gained will not be lost. It is still an exceptionally good time to sell real estate, and purchasing makes great sense for many. Real estate continues to be one of the best ways to build wealth and will remain true through 2022.”

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