Housing Supply Overview
With the U.S. economy booming, and with inflation at its highest level in nearly 40 years, the Federal Reserve recently announced the accelerated tapering of their bond purchasing program, now set to end March 2022. A series of hikes in the federal funds rate will likely follow. Economists expect the cumulative effects of these efforts will move mortgage interest rates higher through the end of 2022. Although still low by historical standards, an increase in interest rates may serve to soften buyer demand somewhat as affordability becomes a more influential factor in home purchases. For the 12-month period spanning January 2021 through December 2021, overall Pending Sales in the Western Upstate region remained flat for the period. The price range with the largest gain in sales was the $300,001 and Above range, where they increased 18.8 percent.
The overall Median Sales Price was up 13.8 percent to $239,000. The property type with the largest price gain was the Single-Family Homes segment, where prices increased 14.0 percent to $245,000. The price range that tended to sell the quickest was the $100,001 to $150,000 range at 49 days; the price range that tended to sell the slowest was the $300,001 and Above range at 58 days.
Market-wide, inventory levels were up 0.1 percent. The property type that gained the most inventory was the Single Family segment, where it increased 2.7 percent. That amounts to 1.7 months supply for Single-Family homes and 2.6 months supply for Condos.
The 2021 housing market was one for the history books. After three consecutive months of increases recently, existing home sales are on pace to hit their highest level in 15 years, with an estimated 6 million homes sold in 2021 according to the National Association of REALTORS®. Sales prices reached new heights, inventory hit rock bottom, and homes sold in record time, often for well above asking price. Mortgage rates, which began the year at historic lows, remain attractive, and homeowners who choose to sell in the coming months can expect to see plenty of buyer activity due to pent-up demand during the pandemic.
New Listings were down 12.4 percent to 403. Pending Sales decreased 30.3 percent to 265. Inventory grew 0.1 percent to 981 units.
Prices moved higher as Median Sales Price was up 4.8 percent to $244,173. Days on Market decreased 33.3 percent to 44 days. Months Supply of Inventory remained flat at 1.8, indicating a stabilizing supply-demand balance.
Looking ahead, experts anticipate many of the housing market trends of 2021 will continue in 2022, albeit at a more moderate level. Strong buyer demand and inventory shortages are likely to persist over the next year. Home sales are projected to remain strong but will be tempered by the limited supply of homes, higher sales prices, and rising interest rates, with the Federal Reserve planning multiple rate hikes in the new year. Price growth is expected to slow somewhat as a result, but affordability will likely remain a top constraint for some homebuyers.
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