Our 2021 Real Estate Market Overview & 2022 Market Forecast Is Here
December 30, 2021
December is always a good month for reflection…to take a look back at the previous year and to plan ahead for the year that’s just around the corner. Since real estate is the name of our game here at Varma Realty Group, we thought we’d take a look in the rearview mirror at 2021 and talk about what trends we saw in the market and then take a look ahead at what we think lies in store for 2022.
The real estate market saw unprecedented rapid growth between May 2020 and May 2021. According to Forbes magazine, the number of homes on the market decreased 53% from 2019 to 2020, due in large part to COVID-19 pandemic-related economic circumstances. And thanks to the laws of supply and demand, this lack of available homes for purchase caused a surge in home prices that hasn’t been seen since right before the housing market crash of 2008.
The year 2021 saw multiple offers on the day of a property listing and bidding wars between potential buyers, driving selling prices up thousands of dollars over list price. Some buyers even offered to forego inspections as enticement for their offer to be chosen. Between August 2020 and August 2021, home prices soared 19.9%. As soon as a house was listed, it went pending. Realtors were busy. VERY busy.
Market analysts have argued that this record real estate year was sparked by a combination of record low loan interest rates and the pandemic having caused people to spend more time at home and for some, to move their work to a home office. A need for bigger houses with different scenery and the ability to finance that need caused the 2021 real estate market to look like a Kmart the Christmas of 1983 when parents were shopping for a Cabbage Patch doll.
Since then, the real estate market seems to be returning to its usual “seasonal” ebbs and flows. Houses are taking longer to sell. The bidding wars have gone from 7-10 offers to 2-3.There is expected to be more housing supply in 2022 as pandemic moratoriums on mortgages end. Price growth is expected to slow. The Federal Reserve is expected to raise loan interest rates to keep up with inflation. The beginning of the year is still expected to be a seller’s market, but time will tell as the year progresses.
If you have any questions about buying or listing real estate in the Greater Cincinnati area, Varma Realty group would be happy to speak with you. You can contact us at firstname.lastname@example.org or at 513-307-3599.
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