The data is in and strong December home sales crowned 2021 as the busiest year for homebuying in the 14-year history of the RE/MAX National Housing Report. According to the latest report, which measured 51 metro areas, December 2021 home sales were the second highest for the month in report history, trailing only December 2020. In fact, there’s evidence to suggest December home transactions could have been even stronger had it not been for record-low inventory.
Contributing to the craze, the year 2021 ended with the smallest number of homes for sale in the 14-year history of the report. The 10 months with the lowest inventory in report history all occurred in 2021. Based on the rate of home sales in December 2021, the Months Supply of Inventory decreased to 1.2 compared to 1.4 in November 2021, and decreased compared to 2.0 in December 2020. For context, a six months supply indicates a market balanced equally between buyers and sellers.
The ups and downs of the housing market since the onset of the pandemic in early 2020 have proven one thing: homebuyers are resilient – and those who are able to get in the game have wasted no time. Nick Bailey, President and Chief Executive Officer of RE/MAX, LLC, thinks the hot streak is likely to continue into 2022 but is hopeful more sellers come off the fence to alleviate some of the challenges buyers have been facing for years.
“December capped a fantastic year for home sales. After a busy 2020, we expected 2021 to be even better – and it was. Buyers shrugged off all sorts of potential obstacles – high prices, record-low inventory, stiff competition for available listings – and kept things rolling the entire year.”
Adds Bailey, “The story of housing in 2021 was centered around high demand that led to a substantial increase in sales despite ultra-low supply. What’s promising for 2022 is that many of the factors which drove record sales in 2021 remain in place. Interest rates are still attractive, workplace flexibility continues, and many homeowners are sitting on a mountain of equity. If more of them become sellers, there’s ample reason to think the hot streak will continue. The past two years have proven that buyers are out there and ready to go.”
“We thought 2020 was busy, and 2021 blew it out of the water. Median sales price for single family homes increased more than 20% over 2020 while days on the market decreased by more than 62%,” Jones says.
“Even more profound was the month’s supply of inventory, which decreased by almost half. Pre-COVID, we were already experiencing low inventory which was exacerbated over the past two years due to, among other things, supply chain issues, extraordinarily low interest rates and many people rethinking the way that they live, play and work. Looking ahead to 2022, I expect demand to remain high, even as we start to see interest rates creep up slightly, and I expect to see prices continue to increase but likely not at double digit rates we saw the past year.”
With the first month of 2022 not yet over, Anthony Askowitz, Broker/Owner of RE/MAX Advance Realty in Miami, Florida, weighs in on how the year is faring against these predictions. He says, “So far, we have not seen a slowing due to interest rates. We have noticed less of an urgency from buyers willing to pay whatever the seller demands to get a property.”
Commenting on the adaptability of full-time, professional real estate agents Askowitz adds, “The agents are adjusting and evolving in the way they do business. They are becoming more efficient in time management, allowing them to invest in their careers by advancing their education and earning new designations either in commercial fields, or the cultivation of international sales.”
Only time will tell what the 2022 housing market will bring, but RE/MAX agents are prepared to navigate any environment on behalf of their clients. Here’s the need-to-know data in the latest RE/MAX National Housing Report:
Despite Inventory Constraints and Rising Home Prices, Home Sales are Still Going Strong
December 2021 home sales were the second highest for the month in report history, trailing only December 2020. Despite the strength in home sales, December sales defied recent month-over-month moves. December 2021 home sales were actually down 0.8% from November, which had an unusually high total. The markets with the biggest decrease in year-over-year sales percentage were San Francisco, CA at -21.9%, Manchester, NH at -17.6%, and Atlanta, GA at -17.1%. Leading the year-over-year sales percentage increase were Wilmington/Dover, DE at +8.9%, Billings, MT at +8.3%, and Boise, ID at +8.2%.
Home Prices Continue to be at an All-Time High
December’s Median Sales Price of $335,000 was up 1.4% over November and 11.5% year over year. The November-to-December increase is slightly higher than the 1.2% average for the five-year period from 2015-2019. While the highest average sale price of the year typically is reached in early or mid-summer, for context, October’s $340,000 was the highest in 2021 and in report history. No metro areas saw a year-over-year decrease in Median Sales Price while 32 metro areas increased year-over-year by double-digit percentages, led by Phoenix, AZ at +28.4%, Tampa, FL at +25.7%, and Raleigh-Durham, NC at +25.3%.
Sellers Rejoice: Homes Are Still Selling Quickly
The average Days on Market for homes sold in December 2021 was 31, up two days from the average in November 2021, and down seven days from the average in December 2020. The metro areas with the lowest Days on Market were Nashville, TN at 13, Cincinnati, OH at 16, and Omaha, NE at 18. The highest Days on Market averages were in Des Moines, IA at 92, Miami, FL at 76, and New York, NY at 71. Days on Market is the number of days between when a home is first listed in an MLS and a sales contract is signed.