At the beginning of the pandemic, many Americans believed that we might see a pullback in the real estate market. However, this could not have been further from the truth. Over the past two years, the real estate market has shown significant strength and resiliency. Across the country and by any metric (total sales, median prices, time on market), the demand for housing has remained incredibly strong. This strength in the housing market has been one of the most significant drivers in the U.S. economy.
A look back at the data in 2021
Before looking ahead, we must analyze the data for the housing market over the past year.
- Existing home sales exceeded 6 million units in 2021. This is the highest figure in 15 years.
- Median existing-home prices recorded year-over-year increases in October 2021 for the 116th consecutive month. This is the longest-running streak on record.
- According to the National Association of Realtors® “Profile of Home Buyers and Sellers“, homes typically sold at asking price and in just one week.
- The two most common motivators for buyers and sellers in 2021 were to have additional space and to live closer to family and friends.
Looking ahead in 2022
Overall, housing demand is expected to continue although the inventory of homes for sale will continue to present challenges. With increased demand, we should also expect to see an increase in prices. However, both demand and prices should moderate as the year progresses.
As the Federal Reserve responds to rising inflationary pressures, we also expect mortgage rates to rise gradually as well. Needless to say, higher mortgage interest rates will begin to erode buying power for many buyers. These pressures will likely drive some prospective buyers out of the market as well.
Assuming supply chain and labor shortage issues do not persist throughout the year, we should see home builders increasing their production throughout the year. Assuming this holds true, this will help alleviate the inventory constraints that have plagued the market for the past few years.
After two years of dealing with a pandemic, we have all learned to expect the unexpected. With this said, real estate continues to be a wise investment for many Americans, particularly here in South Florida. During the 2021 year, 87% of buyers used an agent or broker, and 90% of sellers hired an agent to sell their home. If you are ready to buy or sell a property in South Florida, contact Live South Florida Realty, Inc. today!
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!