The curtain has fallen on the real estate year of 2021. Looking back, it was a year of offer dates, 24-72 hour irrevocable dates, bully or pre-emptive offers, multiple offers, selling over asking etc. Yes, it was quite the year with continuing trends that began in the spring of 2020 just after the COVID 19 pandemic took hold. With the recent emergence of the Omicron variant, the pandemic continues to rage on. Will the real estate market continue to rage on too? Based on looking at some data and consulting some real estate resources it seems the market will continue to roll on nicely into 2022.
According to the recently released Royal LePage Market Survey Forecast, the aggregate price of a home in Canada is set to rise about 10.5 % to $859,700 in 2022. (See chart included) In Huntsville, the average price as of Dec. 31, 2021, was $744,833 up almost 25% from Dec. 31, 2020, and up 153% since Dec. 31, 2011. (See chart included)
The homes that are selling are in general selling for over the list / asking price. As of Dec. 31, 2021 homes in Huntsville are selling about 4% over the list / asking price whereas back in 2011 homes were selling about 5% below the list / asking price.
At the present time, the market is in favour of sellers. The basic law of supply and demand is dictating some market trends at this time. Home supply is at its lowest point on recent record. In Huntsville months of inventory as of Dec. 31, 2021, was 1.4 months. The months of inventory have gradually slipped each year from a high of 9.4 months in 2011.
Not only is the inventory of homes for sale historically low, but the homes that are listed for sale are also selling faster. In Huntsville Median Days on the market as of Dec. 31, 2021, was 12 days. Once again this number has gradually reduced each year from a high of 56.5 days in 2011.
Other factors that will likely contribute to a sellers’ market in 2022.
- Demand from buyers who were unable to finalize a purchase in 2020 or 2021
- Growing need for homes from newly formed households and newcomers coming to the area
- The current rise of the Omicron variant may contribute once again to more people working from their home bringing into focus the importance of a home as a place to both live and work. Buyers may realize they need to make a change in their housing requirements to accommodate these additional needs.
- Typical travel and entertainment tendencies may be held off again and buyers will continue to conserve more cash to possibly contribute to the purchase of a new home or even a recreational property.
Paradoxically the threat of rising interest rates may push buyers into making a home purchase now. It is felt that mortgage rates are likely going to increase at some point in 2022. The onset of higher interest rates coupled with some unknown factor/ event that crops up in 2022 may begin to slow the market down from the lofty heights where the market currently exists.