2022 Predictions: Real Estate Bubbles And More SPACs? – Forbes

At long last, 2021 is drawing to a close, and the new year is right around the corner. This past year brought a return to stadiums for college football and a new era of Name, Image and Likeness (NIL) deals, the delta and omicron variants, surging inflation, a surprise run for GameStop, the meteoric rise of retail investors united around online platforms like Reddit, and trouble for newer trading platforms like Robin Hood. It’s all but guaranteed that 2022 will bring its own surprises. And while the future is a constantly changing place, here are a few predictions for what the year to come may bring: 

SPACs

SPACs slowed down in early 2021, but as the year draws to a close they are making a comeback, which will more than likely continue well into the new year.  While there will be plenty of SPAC action going into 2022, their target companies will be facing more scrutiny and there will be far more emphasis on due diligence for those companies than there has been in the past.

RETURN TO OFFICES

The pandemic is a moving target, and it’s impossible to say what the impact of new variants will be or how they may disrupt return to office plans. However, companies, management and public health officials now have two years of experience in dealing with it. Whether workers will return to offices depends on the company in question and the type of work it does. Do not underestimate the incredible intensity and emotion and energy that takes place on an in-person trading floor, for instance. There is constant communication, and there is no way that can be replicated virtually. Yet other businesses may not be as dependent on individuals occupying offices. There will be no one-size-fits-all return to office solution.

The question of whether to sit in an office rests upon what value there is for companies and their employees to either be in an office full-time or use a hybrid model that enables collaboration. Many sectors found they had fiscally productive years despite the remote model they adopted. Leadership in the workplace of the future will likely seek greater integration of work and life. Leaders will constantly weigh information about their company’s performance and public health to ascertain what serves the greater good and soundness of the organization. Individual leaders will be tasked with listening to the needs of their most productive colleagues and balance that with growth. Going “back” is no longer an option, so leaders will have to be smart and adapt to changing conditions.

INFLATION

The Federal Reserve will be on top of inflation. There are still some outstanding questions, such as how we are going to adjust once the worst of Covid-19 is behind us. However, since everybody is so on top of inflation today and there is such a focus on it right now—even if the Fed was six months late in reacting—we won’t go to 14–16% interest rates on long bonds like during the 1980s. That happened during other periods in our country’s history because we were not anticipating inflation, and we let it get out of hand. That won’t happen this time.

BUBBLES

While there’s been a lot of chatter about possible bubbles in crypto in recent months, the biggest risk for a bust may once again be in real estate. It’s unlikely that it will be like 2008 again (this isn’t a systemic problem), but one result of the Covid-19 pandemic is that certain local markets may have become overvalued. As people sought to leave cities during the early months of Covid-19—moving from New York City to Northern New Jersey or Westchester County, for instance—and continue to seek larger homes during the era of remote work, real estate prices have boomed in some suburbs and smaller cities. As the pandemic begins to wane and people return to cities, some of these local markets could soften and pandemic buyers may find themselves underwater on houses they purchased at inflated prices.

COLLEGE FOOTBALL

Schools are going to continue ramping up competition with big Name, Image and Likeness (NIL) deals in a bid to win the best players. Big boosters are fanatical in their desire to win and will do whatever they have to do to take care of their people in 2022. Likewise, players are aware of their potential to earn substantial sums via NIL and will seek out the best deals for themselves, as they should. Finally, the NCAA will likely face increasing pressure over its failure to lead on the NIL issue as well as changes to the transfer rule.

THE YEAR AHEAD

Of course, there’s no way to say for certain that any of this will happen or happen exactly the way it is described here. However, there is a guarantee that 2022 will find a way to surprise even the most prepared investors. Everyone needs to do their own due diligence and the world needs to take on the challenge of the pandemic one day at a time, paying attention to changing circumstances.

Do you have predictions for 2022? Share yours on Twitter @CoachJoeMoglia.