This year has been one for the history books! The housing market has seen big changes over the past 12 months, and we have been very fortunate at Kerby and Cristina helping over 775 clients achieve their real estate goals of buying, selling or both! Over the course of 2021, we’ve successfully launched new programs for our clients such as “Buy Before You Sell” and have continued our Cash Offers Program. We are also especially thankful for our amazing clients and have enjoyed seeing you at our 6 client appreciation events this year. This couldn’t have been accomplished without our world-class team, which has grown to over 30 agents and many team members, who help make Kerby and Cristina the team they are today. Today we share a recap of what’s happened in 2021, and what to expect in 2022.
Interest rates throughout 2021 have been at historic lows, averaging 3% compared to the 2000s which hovered around 7%. That housing market saw the same drastic price drop, however this time around there is no housing bubble and sellers saw record prices for their home sales. Homes are appreciating in price and coupled with low interest rates are making it a great time for sellers to sell! Looking into 2022, the projected interest rate is around 3.55%. With the slight rise in interest rates, home prices are tapering to some degree, resulting in the housing market balancing out for this coming year.
EFFECTS OF COVID-19
The pandemic created situations in our economy and the housing market that no one could have predicted. We saw a peak in home prices throughout 2021, with homes selling in record time, some selling with sight unseen offers! This was a result of an imbalance of supply and demand, with demand greatly outweighing supply. Buyer fatigue also became more prevalent, resulting from the intense bidding wars in the spring and summer market. Going into 2022, we are seeing buyer activity pick up again as more inventory comes into the market with buyers still writing very strong offers.
SUPPLY AND DEMAND
2021 saw a radical disproportion between supply and demand. Low inventory in the housing market meant sellers held most of the power and buyer fatigue became commonplace. This also meant home prices were appreciated beyond all projections, a staggering 11.74%. This is forecasted to drop slightly to 5.82% in 2022 which is still an incredible gain! We predict a busy spring and summer market in 2022, still favoring sellers who want to take advantage of how much their homes have appreciated.
TODAY’S SELLER PROFILE
It’s been a sellers’ market in 2021, and we anticipate the same as we head into 2022. If you are thinking about upgrading, downsizing, or moving to a new area, 2022 it is a great time to take advantage of equity within your home. According to Buffinis Real Estate Report the average equity a seller has in their home is $85,000 and homes that sold in 2021 had an average of 4 offers before closing.
TODAYS BUYER PROFILE
Despite a shortage in inventory, homebuying activity was strong throughout 2021. We did see a slight slowdown throughout the year as buyers got “fatigued” of losing out on properties after multiple offers and of the competition the earlier months brought. We are already seeing an uptick of activity as we start 2022 and anticipate another competitive market as we enter into the spring months. It is noteworthy that 34% of all buyers last year were first time homebuyers and experts predict this will increase in 2022.
Being in the industry for over a decade (14 years to be exact) and experiencing multiple real estate markets our business continues to be built off relationships. We always strive to provide our clients with outstanding service and to be your real estate team for life. If you have questions or plans of buying or selling throughout the next year we would be honored to help you. Reach out to us today to get the process started!