We're Not in 2014 Anymore!
Real Estate Market 2021 vs. 2014
The picture to paint for August 2021 isn’t just about the stats of the market, which I will get to, but what has been the trend since 2014. We reviewed data year to year from 2014 to 2021 and looked at the inventory--inventory has shrunk by 73% since 2014. 73%!! WOW, that is a massive amount of loss of inventory and one of the main reasons that we are in a seller’s market. In 2014 the median selling price was $219,900. Today the median selling price is $352,000! That is a 60% increase in values in that period of time.
The inventory simply cannot grow at a pace to allow the market to recover and switch from a seller market to a buyer market. The market inventory reduction leveled off in 2016-2018 with only 1-6% loss of inventory through that period of time each year. Then in 2019 inventory was down 37% going into 2020, hence the start of the boom that we saw in 2020 and the seller market taking off. You add in great mortgage rates, sub 3%, and everyone wanting to have new and more space after being in their homes for months--all added fuel to the already hot market.
Rates will continue to be sub 3% to 3.5% in the next year and that up-tick in rates won’t change the market enough to add more inventory and adjust the pricing. About 500 homes a year are built in the area and another 6000 existing homes are sold each year.
The median sale price from August 2020 to August 2021 is up 10.9%!! Normal market average is 3-4% per year in our area. That is a 300% increase in values!! Sales are up 3% in volume YTD from 2020.
Our message to sellers is that it is still a great time to list, before it gets cold and people shut-in for the winter. Our message to buyers is that right now you are up against a lot fewer offers, so you still have to come with a strong offer, but your odds have significantly improved.