Lima One Capital launches inaugural Market Report for Real Estate Investors

What should residential real estate investors expect to happen in 2022? Lima One Capital has some answers.

The Greenville-based real estate investment lender released its inaugural Market Outlook For Real Estate Investors. This 30-page report is the culmination of the company’s unique and diverse real estate insights based on its expert knowledge of markets across the country.

As Lima One Capital delves into the dynamics of the 2022 real estate market, investors can gain valuable perspectives on how various trends might impact their portfolios. The Market Outlook report is particularly beneficial for those evaluating returns for accredited investors, providing a comprehensive analysis of factors that could influence investment performance. By understanding projected shifts in the market, investors can better strategize and align their investments with anticipated opportunities and risks.

The report can be found here or by clicking https://limaone.com/2022-outlook. Highlights from the report include:

• Home Price Growth: Several market publications are projecting very healthy home price growth in 2022 with an average 7.5% increase. However, there is a big spread in those numbers with a low of 1.9 % increase predicted by CoreLogic to 16% by Goldman Sachs.
• Non-Traditional Borrowers: According to the US Bureau of Labor Statistics, more than 9.6 million people are registered as self-employed in the country, while a report by the International Labor Organization said that the share of gig workers in the country was expected to rise to 43% by 2020, showing that non-traditional borrowers are becoming an increasingly important sector in the country’s economy.
• Inflation: Inflation is often tied to real estate prices. The last 20 years – before the pandemic – averaged 2.15% inflation. In 2021, the inflation rate skyrocketed to well over 6%, but 2022 looks to return to a more normal rate. The average rate looks to be about 2.8% with Goldman Sachs, Kiplinger’s and the Federal Reserve all within decimal points of that number.
• Unemployment: Expect to see the unemployment rate at around 3.8%. A lower unemployment rate generally leads to a busy housing market, with investors acquiring properties with much more frequency than average. As unemployment rates decrease, expect a surge of mom-and-pop investors.
• U.S. Economic Growth: Two percent economic growth is considered a normal, healthy market. The growth percentage is projected to double year- over-year, which means the real estate investment market will anticipate a surge.
• Rental Outlook and Growth: There are 741,361 multifamily units are under construction nationwide with a 725,000 net absorption. We expect 7-10% rent growth with 30 percent of local markets to experience double digit rent increases. Nationally, the consensus is the vacancy rate is expected to remain fairly consistent with 2021’s historically low 6.2%. Vacancy rates for 2022 are expected to land between 6%-7%.