Read today’s headlines: As interest rates rise, mortgage applications fall during Thanksgiving

Trying to predict what will happen in the residential real estate market in 2022 is a bit like trying to predict the weather months in advance, but although the future of home sales and development has become increasingly unpredictable, real estate professionals continue to advocate for their clients.

We spoke with Houston real estate leaders to understand their views on the path of the industry. Although buyers' preference for more space-whether indoor or outdoor-still exists and supply chain issues continue to stifle housing construction efforts, other factors, such as the potential rise in interest rates, are expected to change the rules of the game in 2022. Check out our Q&A with some of Houston’s top players to learn more about their plans for the next 12 months.

* Nancy Almodovar, President and CEO of Nan and Company Properties

* Jeremy Collett, Executive Director of Guaranteed Rate Capital Markets

* Charles El-Moussa, President of Coldwell Banker-Texas

* Jennifer Hamelet, owner of Mirador Builders

* Alex Kamkar, managing shareholder of Bold Fox Development 

* Lance Loken, CEO of Loken Group

* Robin Van Zant, real estate agent, Douglas Elliman

Van Zant: I expect that 2022 will bring home buyers a more balanced and less stressed market. As the market gradually cools down after the pandemic, we have seen a slight shift/slowdown, which should increase the inventory of available homes. Mortgage interest rates are also expected to remain stable in 2022, which is beneficial to home buyers.

Loken: Yes, residential real estate will perform strongly in 2022. Available inventory is still extremely low, and we don't expect it to exceed two months of inventory before the end of next year. Before the pandemic hit, we already had three to four months of inventory for about 5 years, and we have maintained a stable inventory for less than two months for the past 10 months. Strong buyer demand will continue until 2022, and the Houston area will continue to be the preferred destination for relocating buyers.

Almodovar: Yes, things will not slow down by the end of 2021, and momentum will only build in 2022.

El-Moussa: We use our digital platform to keep in touch with our affiliated agents and provide a virtual education series, which will help provide agents with valuable information and resources to help them retain or grow their business. Moving to a virtual platform helps agents quickly learn and adapt to using digital channels to support all aspects of their business. While our office reopens, we will continue to provide almost accessible service and support to accommodate those who prefer to conduct business remotely.

With the influx of out-of-state buyers and relocation trends caused by the pandemic, our affiliated agents benefit greatly from a global network of more than 96,000 agents. We will continue to encourage this proven successful connection to our affiliated agents throughout Texas.

Loken: When a pandemic hits, our first action is to send care calls to all customers to find out if everything is normal or if they need anything, whether it is masks, gloves or toilet paper. We provide options such as virtual consultation, virtual display and mobile notary, and mix virtual and face-to-face events to satisfy all our customers and make them feel most comfortable. Similarly, our team now has more mixed work schedules. They can work remotely most of the time and only enter the office during key team meetings or events. Our biggest demand for 2022 is to recruit more production buyers and listing agents, so we are very focused on finding excellent talents.

Almodovar: At Nan, we have always been one step ahead in the digital field. Before the pandemic, we were already creating listing videos, digital walkthroughs, and Matterports, so fortunately, we didn't have to make too many adjustments.

Almodovar: As the industry develops, agents need to be very organized, practice calendar integrity, and cooperate with a full-service brokerage company, not just charge fees.

Loken: Real estate is always mainly about relationships. Agents should prioritize their field and customer network, and make sure they always communicate with them.

Agents should also focus on prospecting and keeping their pipelines adequate every day. In the case of insufficient listing inventory, agents should focus on obtaining listing business. In today's market, to get the same number of listing appointments as in 2019, at least twice the number of contacts is required.

Van Zandt: As the market continues to change, it is the best practice for agents to keep up with local and national trends. It is important to remember that clients will seek guidance and advice from their real estate agents based on their specific needs. In my opinion, the pandemic has taught us flexibility and flexibility, which is a positive feature that we should continue to have in 2022.

El-Moussa: To convey their value proposition. We know that establishing and maintaining organic relationships in the real estate business is crucial. After all, real estate agents are part of a major and very personal decision in people’s lives. But now more than ever, agents must distinguish themselves by the expertise and quality they bring.

Agents need to prove that their professionalism is essential to clients. Demonstrating your marketing and influence is still an important part, but being equipped with tools and procedures that meet the needs of a variety of consumers can help agents stand out from the competition. This is why we have succeeded in projects such as RealVitalize, which provide home sellers with home improvement resources without upfront costs. Agents are now able to extend the services customers must seek elsewhere, creating a smooth and efficient real estate experience for consumers.

Loken: We see a lot of builders looking for more land in the Tomball and Cypress areas, especially near highways 249 and 290. These areas have great school districts, and there are many opportunities to continue to develop new communities.

Almodovar: In 2022, downtown Houston will continue to develop rapidly.

Loken: If one thing that happened this year further proves that technology cannot replace people and relationships, it is the demise of Zillow iBuyer. Technology will continue to help us support our business and make it run more smoothly, but the people behind the technology are the most important people. We see more and more companies provide better and smarter platforms for CRM and transaction management, and we believe that more brokers will launch one-stop technology solutions for their agents.

Almodovar: Technology has been evolving, and any new software will be used to our advantage in Nan. Technologies that cater to real estate are on the rise, and I don’t think it will slow down.

El-Moussa: It is effective in the eyes of consumers, which ultimately makes the integration of productivity and existing technology possible. For us, this is to provide consumers with the best experience and enhance the ability of agents to develop their businesses.

A good example is the recent Coldwell Banker announcement, which will be released in 2022. The ultimate real estate brand is about to have the ultimate real estate website. We are creating the first true end-to-end experience for home buying and selling. This is an opportunity for innovation to meet consumers' needs where they need them most. It is still in its early stages, but the new website will eventually focus on helping sellers get informative, clear pictures and the full potential of listed houses. We are talking about the final destination of home sellers, with tools unique to the industry, such as Move Meter, which compares the cost of living between cities and cities, and an excellent new seller guarantee program. We are talking about revolutionizing the meaning of guiding people home, reaching people at every stage of the process through the personalized information and expertise provided by our affiliated agents.    

Almodovar: grow strong! At Nan, we always maintain a positive attitude. I want to say that we will see 25%-30% growth in 2022.

Loken: Since opening in 2011, our company has been growing and increasing its business. By 2022, we expect our business to grow by 20% as we introduce more agents and continue to have a strong channel of potential customers every month.

Van Zandt: For urban residents who started working from home during the pandemic, the suburbs have become very popular. Many of these buyers are looking for more space, especially designated home offices, and are less concerned about commuting time due to working from home. However, we continue to experience a very stable market in downtown Houston, which has been very popular throughout history.

Loken: We continue to see migration to the suburbs because people are looking for houses and communities that suit their lifestyles. Many companies in our area are still offering remote or hybrid remote work schedules, so buyers are also looking for larger houses to provide home office space for one or more people in the family.

El-Moussa: Many companies are providing permanent remote work opportunities for their employees, which will continue to promote the exploration of suburban markets and the relocation of domestic buyers, as well as those who postpone relocation due to limited market inventory. Buyers from the east and west are flooding the suburban market. With the reopening of international travel, many foreign buyers are interested in investment opportunities in the greater Houston area.

Loken: For agents, they are constantly looking for housing that meets the needs of buyers, and at the same time looking for entry-level homes for buyers who have been driven out of the market. Traditional brokers need to find a way to adjust their business model so that they can be more competitive with virtual brokers.

El-Moussa: The challenge remains that inventory levels cannot meet market demand, even if new buildings increase. For our affiliated agents, this is an opportunity to use tools and resources that give them a significant advantage over their competitors, and they are also tailored to the consumer's experience. For example, a tool like RealSure, which is a program provided through Coldwell Banker, provides home sellers with an option to choose a guaranteed cash offer to buy their house, and at the same time they work with professional real estate agents People test the market together to beat the cash offer. It also provides home sellers with the advantage of being able to confidently bid on their next home while marketing the current home. It uses the right tools to respond to the needs of consumers, thereby providing opportunities for agents’ business now and in the future.

New and experienced brokers want to work with brokerage companies to help them empower them in a fast-paced and growing market. As a company, one of our biggest opportunities is to convey our value proposition—and us Status as a trusted and nationally recognized real real estate company. A real estate brand for consumers, and our global influence. Provide the best technology to support our affiliated agents where they need it, such as our Listing Concierge program-a powerful marketing plan that uses the most advanced technology to provide all consumers with a comprehensive and high-quality marketing plan spectrum , And help agents win more listings and prove their value proposition.

Almodovar: People are looking for extra space in their homes more than ever. I have many clients who are looking for houses with enough space for two home offices or home gyms. Consumers want to bring the elements of daily life to the comfort of their homes!

Loken: The trend of working from home is changing the demand for housing from buyers today. In addition to having more home office space — or having two home offices — buyers are also looking for houses that provide more land or better outdoor space. If you can work from home, why not work on your decorated terrace? Today's buyers are looking for houses that fit their ideal lifestyle and ideal environment.

El-Moussa: Remote work has changed the reason why people live. No need to be close to the office or worry about commuting time, home buying has become centered on lifestyle and investment opportunities. People who work from home also don't want to worry about having to do any construction work at home, so we see a higher demand for ready-made houses that can be moved in. We have seen that young millennials are motivated to buy their first home, and working remotely gives them the opportunity to find more affordable markets throughout the Houston area.

El-Moussa: As other industries have been severely affected by the shutdown, we have seen many people interested in real estate as a new career choice, especially those from the hotel industry. The hot news of the real estate market, coupled with the flexibility of schedules and the opportunity to control one's own income stream, make it a very attractive option. But there is a difference between obtaining a real estate license and becoming a working real estate agent. We have seen the team grow with the addition of new agents, and they recognize that they need to learn from experienced agents and they can help them expand their knowledge and skills.  

Loken: Yes. Since 2019, the number of real estate agents in the Greater Houston area has increased by 15.9%, and the real estate market is expected to be strong in 2022, and we expect the number of agents to continue to grow.

Loken: The average house price will continue to rise in the next 12 months, with an increase of between 5% and 10%.

Almodovar: We are lucky to be in Houston, where house prices are rising at a conservative rate. I expect house prices to rise steadily in 2022.

El-Moussa: The National Association of Home Builders reports that in the past decade, Greater Houston has submitted the largest number of single-family residential permits, more than any other city in the country. This is not surprising, because long before the pandemic, the Texas metropolitan area was already a hot real estate market, and the development and employment sectors were experiencing tremendous growth. New development projects continue to expand, especially in the emerging markets of Greater Houston.

Loken: Part of the change is driven by more people working from home. We have already seen ExxonMobil plan to close two office buildings in Woodlands and integrate employees into their downtown locations. As they return to the office in 2022, this may affect where people choose to live next.

However, due to supply issues, the price of oil has been rising to US$80 per barrel, and we may see the price rise to US$90 per barrel before the end of the year. We will see oil and gas companies increase production, which in turn will help promote employment in Houston and boost our real estate market.

Colette: By 2022, we will see the industry continue to focus on increasing purchase market share. I expect interest rates to rise, which means that refinancing activities will fall. We will also see the margins of lenders being squeezed, which may lead to an increase in consolidation within the industry. I expect government-sponsored companies (GSE including Fannie Mae and Freddie Mac) to focus on affordable housing. In addition, we are likely to see an influx of new products and new energy sources to expand home ownership opportunities in communities that have traditionally been underserved by the market.

Colette: Although interest rates may rise slightly, I believe they will remain at historically low levels to maintain a favorable environment for home buyers. From a professional point of view, I have experienced about 6-8 interest rate hike cycles, and they always fail to meet expectations; I just don't think the market can operate at significantly higher interest rates.  

Colette: I think large-scale 30-year fixed-rate mortgages that meet the criteria will continue to exist. As the Fed expects to raise interest rates several times in 2022, we may get a flatter yield curve, which does not bode well for adjustable rate mortgage products. With tighter margins, lower issuance, and GSE's high focus on affordability, we may see a slight expansion of credit.

Colette: As the volume of transactions decreases, we may see more resources invested in mortgage technology. We will definitely do this at a guaranteed interest rate. The lower profit margin means that lenders will have to continue to study how to reduce the cost of issuing loans. We should see that the GSE also pays more attention to mortgage technology; some of these initiatives lost their focus during the previous government, with the goal of reducing the risk of the institution and removing it from the regulator.

Kamkar: Our company has several projects in progress, and the pipeline will be extended for a period of time.

Hamerlet: Yes, I have three houses under construction, the prices are 2.6 million US dollars, 4.5 million US dollars and 12.5 million US dollars. I do have agents and buyers calling me to get information about them.

Hamelet: Mirador Builders usually build 50% of custom houses and 50% of houses for sale. I need to add a lot of things for 2023. My assistant will immediately text me to any address in West University or River Oaks, as long as she receives a lot of calls for sale. 

Kamkar: As the new work-from-home policy has caused macroeconomic changes in the economy, the dynamics surrounding housing are changing. I think the land in our area may have been used for more than five years, and it is now close to two to three years.

Kamkar: For developers, the prices of PVC pipes and RCP (reinforced concrete pipes) fluctuate due to increased demand. For builders, we heard that timber prices have come down. Bold Fox believes that the pressure on the supply chain will ease with some minor issues.

Hamelet: I have been selecting materials in advance and paying for them. From copper clad laminate to pipe pruning to large trees, it is vital to leave early before construction. The price of wood is now only valid for two weeks. This makes it difficult to price homes for customers. 

Kamkar: Agents are still an important part of the housing environment. They have always been essential to master planning communities, and they are even more so now.

Hamelet: Mirador is not built in flood-prone areas.

Kamkar: It sounds strange, but we are still in the "consequence" of Harvey. The regulatory framework surrounding drainage and engineering is still being adjusted. Having said that, civil engineers in our region have been at the forefront of helping us build resilient communities and ensure family safety. I believe that in 2022, families will seek value and safety, which means being in a master-planned community.

Loken: Part of the change is driven by more people working from home. We have already seen ExxonMobil plan to close two office buildings in Woodlands and integrate employees into their downtown locations. As they return to the office in 2022, this may affect where people choose to live next.

However, due to supply issues, the price of oil has been rising to US$80 per barrel, and we may see the price rise to US$90 per barrel before the end of the year. We will see oil and gas companies increase production, which in turn will help promote employment in Houston and boost our real estate market.

Hammerlet: The pandemic has aroused interest in large houses with flexible spaces. Two home offices, a home gym and a swimming pool topped the list of buyers.

Kamkar: The pandemic has already promoted the development of oil and gas. As of today, the spot price of WTI is US$84.65 and the spot price of natural gas is US$5.88. The world needs energy to function, and this is even more so when we are out of the quiet period of COVID-19. I expect this trend to continue in 2022.

Almodovar: 100%! In this month alone, we broke ground in four brand new communities, each with 100 houses. New buildings in Houston are being bombed and will not slow down in 2022.

Hamelet: I think so. I received many calls from both coasts and Houston.

Loken: Yes. The number of new housing starts in the Houston market this year has increased by nearly 33%, and the number of new housing starts in our area is still the second largest in the United States.

Kamkar: When talking with people in the industry, they described the market as the current fever. Bold Fox believes that by 2022, builders will start to make profits while keeping the industry and sales quite strong.

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