Despite facing several headwinds in 2021, economists remain optimistic regarding the U.S. economy and real estate market.

COVID-19 had a far-reaching, global impact across all industries, including real estate. Stay-at-home orders, office, and school closures throttled new development and brought the entire world to a halt. With massive shifts in purchasing behaviors, an increase in demand led to supply chain issues, leading to global shortages in a multitude of goods, including building materials, electronics, and vehicles. The stock market plunged, and many found themselves out of jobs with nationwide furloughs and layoffs.  

While COVID isn't over, we've started to return to what could be considered a new normal. The pandemic has changed lifestyles, which some believe will be permanent. These changes have positively impacted the real estate industry, bolstering even more substantial growth in 2022. 

Market Prediction:

Commercial - According to the U.S. Department of Energy, "The buildings sector accounts for about 76% of electricity use and 40% of all U. S. primary energy use and associated greenhouse gas (GHG) emissions." As the world seeks to reduce our carbon footprint, commercial real estate developers and building owners seek to do their part. This trend will continue into 2022, with sustainable building practices and green building. While some businesses have adopted to work-from-home, many are re-opening, and commercial real estate development is expected to re-gain momentum in 2022. As the market stabilizes and pushes past the headwinds of the pandemic, the commercial real estate sector shows signs of moving towards it's pre-pandemic growth rates. In Q2 2021, the commercial property price index grew 4.8% Y/Y, and deal volume grew 81%. According to Deloitte Insights, commercial real estate developers will maximize value through re-purposing and retrofitting property rather than new construction.

Hotel - Business travel has had a slower recovery than leisure travel. Hotel demand dropped 57% during the pandemic leisure travel more than doubled occupancy by 2020, and RevPAR reached 94% in 2021. Going into 2022, U.S. business travel is expected to normalize at a slower rate, however leisure travelers and inbound business travelers will begin to fuel growth; CBRE is forecasting an occupancy gain of 8.0% in 2022, and a 7.1% boost to ADR. With hotels on their trajectory to recovery, investments in hotel properties will also increase.

Multifamily - Multifamily investments are showing a strong return on investment and are projected to continue to do so in 2022. More than 15.9 million people moved during the pandemic according to MyMove; Texas, North Carolina, Florida are among the states with the highest inbound population growth. This massive population shift fueled the real estate market, including rentals, in many key cities. With many areas experiencing demand well outpacing supply. Combined with low interest rates and increased demand, the multifamily sector will prove to be a solid investment strategy in 2022.