A Record-Breaking Year for Housing!

2021 was a record-breaking year for housing and real estate. Redfin compiled a list of 10 housing records that we experienced last year. And some of these themes are expected to continue into 2022. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. It's been an unusual year to say the least. It was the second year of the pandemic and one where many Americans have changed where and how they live because of the COVID-19 and a surge in remote work. That has also changed the kind of homes they buy and rent. Redfin Chief Economist, Daryl Fairweather, says: "The ongoing pandemic, including its seismic effect on the U.S. economy and the way Americans live and work, has made 2021's housing market anything but typical." He says: "Remote work, low mortgage rates, a shortage of building materials and wealth inequality that has allowed an influx of affluent Americans to buy vacation homes, to name just a few factors, have come together to create a historic year for real estate. Buyers paid more for homes, bought sooner than they planned, searched outside their hometowns or all of the above." (1) Redfin's List of 2021 Housing Records Let's take a look at Redfin's list: 1 - The national median home price hit an all-time high of $386,000 in June. That's a 24.4% year-over-year increase. Home prices have been going up all year, thanks to a lack of inventory and strong demand. Low mortgage rates have also helped fuel that price growth. Redfin says that home prices are higher than pre-pandemic levels in almost all parts of the nation. 2 - Inventory levels hit a record low in June when there were just 1.38 million homes for sale. That was 23% lower year-over-year. The problem has gotten worse because of high demand, homeowners deciding to refinance at low rates instead of selling, and new construction that isn't keeping up with the need for homes. 3 - Homes are selling more quickly than ever before. Redfin says the typical home spent just 15 days on the market in June and July. In June of 2020, the median number of days on the market was 39. Buyers have been snatching up homes as fast as they can. Many do so without seeing the homes in person. 4 - Sellers were also taking advantage of the situation. More than 60% of them accepted offers within two weeks, which is an all-time high. 5 - More than 56% of the sold homes went for more than the listing price. That's almost 30 percentage points higher than 2020, and a new record. Redfin says the average home sold for 2.6% over the list price. Almost three quarters of all Redfin agents say their buyers faced competition. 6 - The 30-year fixed-rate mortgage went as low as 2.65% in January. That's the lowest ever, and is one reason for the home-buying and refinancing frenzy that we've been seeing. 7 - Investors have been busy buying almost one out of every five homes on the market. That's 18.2% of the purchased homes and 11.2% more than the year before. Total dollars spent by investors was a record $63.6 billion in the third quarter compared to $35.7 billion during Q3 2020. 8 - Demand has almost doubled for second homes. It was up 91% in January, mostly due to a surge in remote work. Instead of working at home, employees have been enjoying their work hours at beach homes and mountain cabins. 9 - Almost a third of Americans wanted to move to a new city this last year, thanks to remote work and the ability to work from wherever. Many workers left expensive cities in search of more affordable areas. 10 - Luxury home prices hit new records. The median sale price for a top tier home was 25.8% higher year-over-year, or a little over a million dollars. Mid-priced home were up 16% and affordable homes were up 13.2%. This data is food for thought as we head into the new year, and start mapping out our investing strategy. Mortgage rates are expected to move higher which will slow down price growth a bit. But home buyer demand is expected to remain high along with supply chain issues that are interfering with home construction. And for those who can't buy a home, they will very likely be looking for a single-family rental so they can live like a homeowner. One economist, Logan Mohtashami, lead analyst for Housing Wire, actually believes rates could decrease in 2022. To find out why, I've invited him to be my guest on my 2022 Housing Forecast this Thursday. You can sign up for that at newsforinvestors.com. It's free to join and then you'll get access. I interviewed Logan on my other podcast last Spring, and based on the great reviews, I'd say you won't want to miss this webinar. He's been eerily accurate with his predictions, which have often been the exact opposite of what you see in headline news. Again, you can sign up for the free webinar at newsforinvestors.com. You can also join RealWealth, for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.worldpropertyjournal.com/real-estate-news/united-states/seattle/real-estate-news-top-10-housing-trends-of-2021-redfin-2021-housing-data-housing-records-set-in-2021-daryl-fairweather-12865.php