2021 Breaking All the Real Estate Records
Low interest rates, housing shortage, everyone working from home, etc etc etc., all of which came together to create the perfect storm for another record-breaking year in real estate. Here are the new housing records set in 2021.
Rates were low low low low low low (sung in Flo-rida's voice). Prior to the pandemic, the lowest rates to date were set in 2012 at 3.31%. This year, it went down to 2.65%!
Inventory was non-existent. So many buyers, so little homes.
Home price appreciation went through the roof. Annual home price growth reached a new high in October, increasing 18% year-over-year.
Higher prices = larger loans, reaching $1.6 trillion by the end of the year. My mind cannot even compute that many zeroes.
Asking prices were higher than ever before, a stat that's probably skewed in the Bay Area since we apparently like to price homes $1M below the actual sales price.
Median sales price hit a new high, surprising no one.
Sellers gained the most in resale value, averaging $100,178 in profits on a typical home sale in the third quarter of 2021. Times that by a few multiples for the Bay Area.
Homeowners had so. much. equity. Increasing prices led to a record $9.4 trillion in tappable equity during the third quarter (the amount of money a homeowner would be able to access from their home while still retaining 20% equity). Imagine all the new marble countertops and stainless steel appliances you can get with that $$$.
Homes sold fast! Competition hit a peak in March/April when 61.5% of homes under contract had an accepted offer in two weeks. 46% of homes had an accepted offer in one week. Cut that time in half for the Bay Area.
Rents went up, seeing double-digit year-over-year growth for the past 5 months. Renters are paying an average of $291 more per month in rent than they were a year ago. The largest increase is for 2-bedroom units, with the median price of a 2-bedroom increasing to $1,993, or an additional $330 per month, in large metropolitan cities.
Foreign investors sat on the sidelines, thanks to pandemic lockdowns and restricted travel. They bought 107,000 homes and spent $54.4 billion in real estate purchases, the lowest totals since 2011 when investors bought 210,800 properties and spent $66.4 billion. Imagine the market we would've had if they had actually participated in the fun.
Cheers to the new year with a more balanced housing market! Hopefully.
