The 2021 housing market has been one for the history books. After three consecutive months of increases, existing home sales are on pace to hit their highest level in 15 years, with an estimated six million homes sold in 2021 according to the National Association of Realtors. Sales prices reached
new heights, inventory hit rock bottom and homes have sold in record time, often for well above asking price. Mortgage rates, which began the year at historic lows, remain attractive. Homeowners who choose to sell in the coming months can expect to see plenty of buyer activity due to pent-up demand during the last two quarters of 2021.
Adding to this fluctuating market is the price of lumber.
After a brief leveling last spring and summer, lumber prices are on the rise again. According to the National Association of Home Builders, lumber prices have nearly tripled in the past four months, adding more than $18,600 to the build price of the average new single-family home. Many factors continue to impact the lumber market, with the most recent surge in prices being based on supply chain disruptions, sharp increases of tariffs on Canadian lumber imports and a record number of natural disasters across the country.
Experts anticipate many of the housing market trends of 2021 to continue into 2022, but with increases to be at a more moderate level. The demand on housing inventory shortages are likely to continue 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 possible Federal Reserve plans of multiple rate hikes in the months to come that will impact affordability. Price growth is expected to slow somewhat as a result, but affordability will likely remain a top constraint for some homebuyers.
Locally, in December 2021, New Listings in the Chattanooga area increased 15.5 percent to 865. Pending sales were up 11.8 percent to 881 and inventory levels shrank 36.2 percent to 903 units, while prices continued to gain traction. The Median Sales Price increased 20.3 percent to $287,000. As a point of reference, the Median Sales Price for December 2020 was $238,500. Days on Market was down to 32.3 percent, or 10 days on the market from December 2020, to just 21 days. Sellers were encouraged as Months Supply of Inventory was down 42.9 percent to 0.8 months.
One thing that doesn’t change from year to year is the need to utilize a realtor in your real estate transactions. Whether you’re looking to buy or sell, realtors have the tools and the expertise to make sure you get the most from your most valued investment. That’s Who We R.