Editor’s note: This article was published in the Economic Outlook 2022 section of Record-Eagle. For more stories, click here to read the entire section online.


When it comes to the subject of real estate, most questions begin with “How’s the market?” which is understandable except that over the past few months, everyone seems to want this question in real time. By that I mean days, not weeks, or months, and sometimes hours.

No kidding, the amount of data being traded has turned real estate into a hyper-fast commodity market, much like the Dow Jones, NASDAQ, S&P 500, and other exchanges that can change in hours, minutes, and seconds.

These markets also follow the global markets as the world turns and one day you are happy with the results and the next day your hopes may crumble. Buy/sell cycles react to other markets and economists, experts and real estate experts adjust their reports at blinding rates, and sometimes they are not well informed but stir up hysteria.

Let us first consider the interest rate of real estate mortgages. I bought my first house in the mid-1970s. We called on my then father-in-law’s banker who did us a “favor” by giving us a 30-year fixed rate mortgage at 9 ¾ % when the going rate was 10 ¼%, and he claimed we better take it because we’ll never see a rate that low again in our lifetimes. In the early 1980s, the 30-year fixed rate was at 21% and this banker seemed brilliant.

Fast forward to early 2021 when my wife and I refinanced our home (2.99%) and commercial properties (4.125%).

Yes, for a myriad of reasons, the home finance market has been running for 50 years and we have refinanced many times over that time, always taking advantage of mortgage process discounts each time it dropped from one to two percentage points. .

As it says in The Hunger Games books and movies, “May the odds always be in your favor” and overall they did. Now, with a pullback playing out in the housing market and with many years of historically low interest rates in the rearview mirror, some are predicting disastrous consequences. As part of the strategy to reduce inflation, it is simply amazing to hear housing experts predicting the collapse of the housing market just like, or even worse than, the housing bubble and the Great Recession of 2007- 2009 that followed.

There are a lot of different variables between then and now that just don’t support this except for one common thread. Some would call this common thread greed or avarice, but a recent top investor in myself identified it better as envy.

Look, for those who haven’t been able to take advantage of the market and interest rates for the past three years, I understand the frustration. But if one were to follow real estate markets and interest rates over the past 50 years, I would guess that a rate of 6% to 7% on a 30-year fixed rate mortgage would probably turn out to be a rate average to below average. While housing in our regional market is expensive compared to post-Great Recession housing and construction costs are also considerably higher, one must also ask the question “Did we have it so well for so long and have we operated below the market value of other markets that now we’re just playing catch-up?

This is a very big question to answer without data and data is king right now. In the real estate appraisal world, it’s called Proptech, and it’s the disruptive innovation that’s redefining the world of organized real estate. It is also the last refuge for speculation and investment.

In the last year alone, it is estimated that over $300 billion has been invested in proptech and it currently stands at around $60 billion per month. Five years ago professionals in the real estate industry told us that an inordinate amount of money was flowing into the real estate industry and now we are really starting to see its impact.

Our national association has provided information on proptech designed to help our members understand this developing field and the tools currently available and those to come.

This is changing the way real estate agents will define and fulfill their role using blockchain technology, data lakes, cryptocurrency, and other emerging technology tools and services. These innovations are having a real impact on multiple listings services and how they will operate to keep pace with rapid transformational shifts to create more transparency and consumer-based information and protection systems.

As the residential and commercial real estate markets react to a staccato of economic inflows, the real estate sector is also going through real operational, political and legal disruptions.

Next year will see many changes, almost all focused on consumer benefits and transparency. As residential and commercial real estate markets stabilize after the crash of the Great Recession and a decade or more of record recovery, 2023 will stand out as a year of redefinition and reinvention.