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One could say that the housing market in 2021 was like a rollercoaster that kept on climbing. On average, home prices rose 10.6% across major cities nationwide in the 3rd quarter of 2021. This marked the fastest rate growth in nearly 17 years. Days on market, mortgage rates, median sales prices and inventory all broke records in 2021.
Why did median home prices rise by 19% for single-family homes on Oahu as well as the rest of the country which experienced similar or even higher double-digit increases? Four key factors: the government stimulus, accrued savings during the lockdowns, a pandemic-induced reassessment of lifestyles, and low interest rates.
With the historically low interest rates, first-time homebuyers flooded the market in search of properties nationwide. However, with the low inventory of homes and the continued shortage of new build homes, competition for properties was fierce and the share of first-time buyers in November was 26% across the U.S. This is the lowest percentage seen since 2014.
Second home buyer demand, on the other hand, is up 83% from pre-pandemic levels in the U.S. This is largely due to the fact that lockdowns and remote work have made vacation destinations more desirable. Many are opting to exchange cramped city life for more space. This demand is expected to continue.
What to Expect In 2022?
Here are my key takeaways from all the data I’ve seen:
* The real estate market will be strong, and more balanced compared to 2021
* The severe inventory shortage and price growth of single-family homes will continue the surge in condo sales
* Mortgage rates will increase
* Median home prices will increase moderately
* Rental prices will continue to rise
If you’d like more details on specific neighborhoods, have been thinking about making real estate moves in 2022 or know someone who may be, let’s chat!
For more details on the housing market:
The Housing Market was on a Wild Ride this Year. Here’s what to expect in 2022 – CNN Business
