2021 Market and Questions for 2022

Well 2021 has certainly been an interesting year in real estate.

One thing that I have learned is that know matter how much we think we know..... there is Always more to learn.

I have reviewed scores of agreements of sale that I had to reread 3 times because I was so blown away by the sale prices and the waivers that were included that I thought I was misunderstanding something. But I wasn't, the offers were unprecedented.

So as we wind down the end of this year let's take a good look at where we are now.

Below are 3 graphs of Southeast PA (which consists of the counties of: Philadelphia, Bucks, Montgomery, Delaware and Chester)

These graphs represent all fee simple single family home sales.

As of the date of this survey, we still have three more days left of the year for pending sales to close - there are 718 scheduled to close by 12/31/21.... odds are these below stats will not change much.

This first graph represents 56,129 sales and the green columns show us what the median sale prices were for each month since last Dec. ...

The blue line shows us what the list to sale ratio was for each month- how much over asking price the buyers paid for these homes.

As you can see and also as most of us are well aware - there was a huge leap in median sale prices and also buyers paying over list price (over 100% is over list price) in the late spring into the summer. There has been a little cooling off and right now median sale prices appear to be leveling off.

However, we still have a shortage of inventory.

If we look at the second graph the blue columns show us the number of new listings is the lowest that it has been all year and the yellow line shows us that the median days on market is 11.

So the homes are not typically selling in 1 day like they were over the summer but there is still a shortage. 11 days is quick in the real estate world.

The last graph shows us the median sale prices since 2012 and no surprise that it's been a steady increase with no significant dips with a sharp upturn since 2019.

So, what does all this mean? And what will happen next?

Sorry, no crystal ball here.

But some important questions to ponder.....

1- What happens once Forbearance ends?

As far as I can tell it is still in effect according the most recent info that I could find: https://www.hud.gov/.../press_releases.../HUD_No_21_160

So once forbearance officially ends we could safely assume that more homes will become available which will most likely affect sale prices.

2- Will the interest rates be increased this year? They have been so low for so long.... How long will it last? This typically affects sale prices. Here's what the experts are predicting:

https://www.forbes.com/.../inflation-rising-rates.../

3- Lumber prices are up again - this usually raises the base prices on new construction: https://markets.businessinsider.com/commodities/lumber-price

4. Inflation rates - how will this impact home sale prices if they continue to rise at this pace?: https://tradingeconomics.com/united-states/inflation-cpi

Unfortunately, it's a wait and see game, as usual.

And currently, the sellers are still winning.

For now, if you are thinking about buying or selling then I would strongly encourage you to speak with a realtor that comes highly recommended by someone that you trust. They are the professionals - let them do their job. Sadly, I have seen too many sellers miss out on 10's of thousands of dollars because they wanted to take care of this themselves. And I have seen too many buyers make offers that are extremely risky because they were not properly represented.

I hope this encouraged you to ask questions and I hope that this was helpful in some way.

Personally, I am excited to see what 2022 will bring to the table.

Like I said, always learning.....