It has been a crazy couple of years in real estate across the nation. Summit County has been no exception. Soaring prices, limited inventory & competition for properties pretty much sums up 2021. We will dig into more of the 2021 stats and tell you what to expect as we head into 2022.
Average Sale Price
The average sale price of residential properties in Summit County is up 25% from the 2020 average. In 2020, on average, residential homes in the county sold for $903,871. In 2021, that average jumped to $1,131,822. Averages are one stat we always have to take with a grain of salt. If more high end properties are selling, the average will be higher. If more lower priced properties are selling, the average will be lower. This 2021 stat doesn’t necessarily mean every individual property increased in value by 25%. With that said, we have seen some pretty amazing price appreciation over the course of the year. If you want to know how much your property has appreciated, contact us or fill out this form. We’ll look at your property specifically & let you know how much you could potentially sell for.
Average List to Sales Price
This is an interesting 2021 statistic. It seems that no matter the market, in general, Summit County residential properties sell for, on average, around 97-98% of list price. Maybe it will creep up a percent in a hot market or down a percent when the market is slower. However, 2021 saw this average increase to 101%. This 2021 stat reinforces that there are a lot competing offers that are pushing up prices. Believe it or not, there may still be some “deals” to be had. Those “deals” are in the higher priced properties. If a property was priced above $2million, the list to sales price dropped to just 98% in 2021.
Record Low Inventory
We have been saying it for what seems like years now. Inventory is at record lows. It continues to drop, however. Now we are seeing numbers that are absurd. There are just 81 residential properties for sale as I am writing this. That is fewer homes than are sold in the county in the slowest month of the year, January. That does not give buyers very many options; especially when only 14 of those properties are priced under $1,000,000. It is understandable to see competing offers and prices being pushed higher and higher in conditions like this.
Sales are Flat
Even with record low inventory, sales have been able to sustain in 2021. There were only 9 fewer residential sales in 2021 than there were in 2020. It is important to note that 2020 sales were the highest seen since 2008. The number of sales did decline as 2021 continued. The frenzied start to the year was able to carry the residential sales numbers through the lower sales we saw the last 6 months of the year. Continuing this 2021 stat is not one of our 2022 expectations.
Average Days on Market
The number of days a home sits on the market is a telltale sign of market conditions. A buyer’s market can see home linger on the market for months. While a seller’s market has homes selling almost immediately. The average days on market in 2021 was just 28 days but a 44% decrease from 2020.
Once again, remember that we are talking averages. One home on the market for a year or more can easily drive the average significantly higher. There is always a property, no matter the type of market, that takes a really long time to sell. Generally, that home was priced too high and the market had to come up to it. Or maybe a long overdue price reduction got the home closer to market value. Regardless, it will have an impact on the averages. It is not realistic to say the average home was on the market for 28 days in 2021. There is no doubt that it was a lot fewer than that. In fact, the median days on market in 2021 was only 4.
The crystal ball always is a little fuzzy when we try and predict the future. We have been paying attention to forecasts from the National Association of Realtors as well as a variety of economists. It seems that everyone agrees that 2022 will see mortgage interest rates rise. They could be as high as 4% by the end of the year. While that is still incredibly low historically, it will push mortgage payments up substantially for the 71% of buyers that will be getting a loan. How that will impact demand for properties is very much an unknown. I believe 2022 will likely see a decline in demand but not enough to see prices dip. Pricing may plateau but we shouldn’t see any decline in values just yet.
In a recent survey of economists done by the National Association of Realtors (NAR), home price appreciation is expected to rise, on average, 5.7% in 2022. The economists that participated in the survey predicted a wide range of scenarios from a 10% decline to a 12% increase. NAR’s economist, Lawrence Yun, believes interest rates will rise to around 3.7% and homes will be on the market for 60-75 days by the end of the year.
The Fed decisions on interest rate increases, inflation and the performance of the stock market are all factors that will impact the real estate market this year. It is an ever changing environment. Add the unknown of the pandemic to these other factors and it makes predictions that much harder.