After almost two years of double-digit increases, many experts thought home price appreciation would decelerate or happen at a slower pace in the last quarter of 2021. However, the latest Home Price Insights Report from CoreLogic indicates while prices may have plateaued, appreciation has definitely not slowed. The following graph shows year-over-year appreciation throughout 2021. December data has not yet been released.
As the graph shows, appreciation has remained steady at around 18% over the last five months.
In addition, the latest S&P Case-Shiller Price Index and the FHFA Price Index show a slight deceleration from the same time last year – it’s just not at the level that was expected. However, they also both indicate there’s continued strong price growth throughout the country. FHFA reports all nine regions of the country still experienced double-digit appreciation. The Case-Shiller 20-City Index reveals all 20 metros had double-digit appreciation.
Experts had projected the supply of housing inventory would increase in the last half of 2021 and buyer demand would decrease, as it historically does later in the year. Since all pricing is subject to supply and demand, it seemed that appreciation would wane under those conditions.
Buyer demand, however, did not slow as much as expected, and the number of listings available for sale dropped instead of improved. The graph below uses data from realtor.com to show the number of available listings for sale each month, including the decline in listings at the end of the year.
Here are three reasons why the number of active listings didn’t increase as expected:
1. There hasn’t been a surge of foreclosures as the forbearance program comes to an end.
2. New construction slowed considerably because of supply chain challenges.
3. Many believed more sellers would put their houses on the market once the concerns about the pandemic began to ease. However, those concerns have not yet disappeared. A recent article published by com explains:
“Before the omicron variant of COVID-19 appeared on the scene, the 2021 housing market was rebounding healthily from previous waves of the pandemic and turned downright bullish as the end of the year approached. . . . And then the new omicron strain hit in November, followed by a December dip in new listings. Was this sudden drop due to omicron, or just the typical holiday season lull?”
No one knows for sure, but it does seem possible.
Home price appreciation might slow (or decelerate) in 2022. However, based on supply and demand, you shouldn’t expect the deceleration to be swift or deep.
As we move into 2022, both buyers and sellers are wondering, what’s next? Will there be more homes available to buy? Will prices keep climbing? How high will mortgage rates go? For the answer to those questions and more, we turn to the experts. Here’s a look at what they say we can expect in 2022.
“Consensus forecasts put rates at about 3.7% by the end of next year. So, that’s still historically low, but certainly higher than they are today.”
“Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise. And with more than 45 million millennials within the prime first-time buying ages of 26-35 heading into 2022, we expect the market to remain competitive.”
“With more housing inventory to hit the market, the intense multiple offers will start to ease. Home prices will continue to rise but at a slower pace.”
“We also expect a growing number of homeowners to bring properties to market, taking some pressure off high prices and offering buyers more options.”
“Strong demographic demand will continue to act as the wind in the housing market’s sails.”
Hope is on the horizon for 2022. You should see your options grow as more homes are listed and some of the peak intensity of buyer competition starts to ease. Just remember, rising rates and prices are a great motivator for you to find the home of your dreams sooner rather than later so you can buy while today’s affordability is still in your favor.
Make no mistake – this sellers’ market will remain in 2022 as home prices are projected to continue climbing, just at a more moderate pace. Selling your house while buyer demand is so high will truly put you in the driver’s seat. But don’t wait too long. With more listings projected to become available, your ideal window of opportunity to stand out from the crowd won’t last forever. Work with an agent who knows your local market and current inventory conditions to ensure you have the support you need to make an educated and informed decision about selling in the coming year.
If you’re thinking of buying or selling, 2022 may be your year. Let’s connect to discuss your goals and the unique opportunities you have in today’s housing market.
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Black Friday and Cyber Monday are over, which means some shoppers have wrapped up their holiday buying. But there’s still a group of buyers that are very active this holiday season – homebuyers.
Experts anticipate the real estate market will see a flurry of activity this winter, and that’s great news for today’s sellers. If you’re planning on listing your home, there’s no need to wait until the spring for better conditions – today’s real estate market is already heating up.
The past 18 months brought about significant lifestyle changes for many of us, including the rise in remote work, job changes, and even early retirement for some. For many people, it’s prompting a search for their next home now rather than waiting for warmer months.
Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), points out how this winter may see a significant number of sales:
“Compared to other past winter seasons, this winter season’s sales activity will be stronger. . . . This winter, there will be more sales compared to pre-pandemic winters going back all the way to 2006.”
You might be wondering: what does strong sales activity mean for you? It means there are likely to be more buyers active in the market this winter – far more than more normal, pre-pandemic years.
In the same article, Danielle Hale, Chief Economist for realtor.com, puts it in these simple terms:
“Sellers can expect to see plenty of buyers.”
The more buyers there are in the market, the more likely it is your home will get noticed. That can lead to a multiple-offer scenario or a potential bidding war. Receiving multiple offers on your home means you can select the right offer and terms for your situation – so you can truly win as a seller when you list your house this winter.
If you’re thinking about selling your house, you don’t need to wait until the spring. Buyers are ready now. Let’s connect to discuss why selling this holiday season could be the gift that keeps on giving.
From the opportunity to take advantage of today’s low mortgage rates to changing homeowner needs, Americans have more motivation than ever to buy a home. According to the experts, buyers are making moves right now, creating an unseasonably strong housing market for this time of year.
As we wrap up the fall season and move into the winter months, here’s a look at what several industry leaders have to say about the continued momentum in the current market, and what it means as we head into the early part of next year.
“This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low. The notable gain in October assures that total existing-home sales in 2021 will exceed 6 million, which will shape up to be the best performance in 15 years.”
“So far in November, purchase applications point to another strong month in sales. Still low rates and demographic demand support this strength, even as affordability and inventory headwinds remain.”
“The demand for housing in the United States has reached a fever pitch, a trend that opposes the norm of this time of the year when the market cools as the winter months set in.”
“Strong demographic demand will continue to act as the wind in the housing market’s sails.”
Buyers are actively in the market, and they’re competing for homes to purchase. With the momentum coming out of this fall, all signs point to the winter housing market picking up steam, making it much busier than in a more typical year. And as we’ve seen in so many ways, 2020 and 2021 were anything but typical in real estate. It looks like 2022 may be joining that list before we know it.
If you think the housing market will slow down this winter, think again. Whether you’re thinking of buying a home, selling your house, or both – let’s connect to determine if this winter is your best time to make a move too.
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