Although inflation has hit seven percent across the country and Americans are seeing sharp increases in the price of food and fuel, surprisingly, the real estate market remains strong with no dips in sales expected in the coming year.
According to Compass Executive Vice President Mike Aubrey, the real estate market is expected to be “really good” in 2022 even though he acknowledged that the “frenzy of 2021” is not likely to repeat itself.
Aubrey says that the real estate market is expected to remain “very strong” during 2022. Aubrey said that while the pandemic has had quite a detrimental effect on most industries, “it has been the exact opposite in real estate.”
Aubrey attributed some of this phenomenon to the fact that people are no longer seeing their homes as simply “home.” Because of the pandemic, people are now seeing their homes as a school and as a gym in addition to a place of work.
According to reports released by the National Association of Realtors, existing home sales were up in November, and those sales were at the fastest pace seen since January 2021. The National Association of Realtors said in late December that existing home sales were up by 1.9 percent in November from October sales. Sales were down two percent compared to November 2020, but the increase in sales from January to November 2021 were the highest in ten months.
The Mortgage Bankers Association said that the sales for November saw the strongest reading since early 2021; however, there was a ten percent drop in available inventory.
The median home price also saw an increase – $353,900 nationally – of nearly fourteen percent from November 2020. This can be attributed to a drive in demand brought about by a low amount of homes for sale. Most homes are listed for sale a total of eighteen days before they are quickly purchased. However, there is some optimism for inventory among those in the real estate market.
According to the Census Bureau, there is a surge in new construction as well as in the amount of permits requested for building a new dwelling. The real estate market says that they believe the construction of new homes will help to ease the demand for homes on the market.
Although some supply chain issues have caused a bottleneck in the construction industry, builder confidence continues to edge higher each month for the last four months. Even though it costs more now to build a new home than it did two years ago, experts say that the supply chain is not dampening the industry as people still want to buy homes – even if they have to build one.
Aubrey also pointed out that there is no exodus from the suburbs – “the suburbs are still doing great; any perceived exodus from cities has completely changed.”