Showings were down this week not only compared to last year, which was booming abnormally due to pent-up demand, but also lower than two years ago before Covid. Pending listings were a wee bit higher than new listings as we drop into holidays the coming last two weeks of the year.
So what will happen to the housing market in 2022? We have already talked about how home sales are predicted to be strong in spite of gradually increasing interest rates. Prices are also predicted to continue to rise because of low supply and high demand, although not as much as in 2021. So who were the biggest real estate winners and losers nationwide in 2021? Read about it below, based on info from Realtor.com
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
Biggest 2021 real estate winners
- FLORIDA – became the destination for people during the pandemic, with more than 300,000 people moving to the state between April 2020 and April 2021 – resulted in year-over-year price gains of 19% in November (compared to 9.4% in the Twin Cities)
- SUBURBS – in 2020, suburban home prices grew faster than urban for the first time since 2017 as homebuyers searched for more space inside, outside, and between neighbors – the number of suburban shoppers was 42% higher than before the pandemic, and typical suburban home sold about 3 weeks faster this September than in 2019
- BABY BOOMERS – older sellers were able to cash in on this extreme seller’s market as they downsized and/or moved closer to family and friends – average profit margin on a medium-sized home was $100,178, the highest level since the end of the Great Recession
- WALL STREET INVESTORS – deep-pocketed, large real estate investors capitalized on the massive shortage of homes to pay cash and turn homes into rentals – investors made up 5.5% of all home purchases in the first seven months of 2021
- REFINANCING HOMEOWNERS – mortgage rates hit a low of 2.65%, offering a once-in-a-generation opportunity to lock in a record-breaking low long-term mortgage rate
Biggest 2021 real estate losers
- MILLENNIALS – homebuyers aged 25-40 made up the 34% of the market last year, competing in a market never seen before – they ended up spending 9.6% more on their homes than in previous years due to the massive inventory shortage and resulting insane competition
- AUSTIN, TX – American’s fastest growing city became even more so, with new tech companies arriving steadily including Tesla – it is also one of the most popular destinations for remote workers in 2021 – the influx of new buyers sent list prices about 50% higher and rents 30% higher than re-pandemic
- HOME FLIPPERS – steep price jumps for securing homes to flip combined with rising costs for construction and appliances and supply chain delays all ate into their bottom lines, resulting in a 7% drop in profit per house and the lowest profits since 2008
- RENTERS – after the end of moratorium on rent increases rental rates have risen about 9% across the country, with some areas seeing increases of 30% or more
- SAN FRANCISCO BAY AREA – when remote work became the norm for many tech workers, many decided to move to more affordable locations and San Francisco saw a 31% increase in people leaving the city while 21% fewer people moved in to take their place – despite this mass exodus, home prices grew 20% making the city even more unaffordable