December 2021 Market Update

As the year comes to a close, we continue to see a fast-paced, competitive housing market fueled by low inventory. However, we are also continuing to see historically low interest rates, which contribute to great buying power for anyone considering purchasing! The cold weather and snowy conditions also bring out the most serious buyers, which means it is the best time of year to sell for those wanting to attract a committed audience.

The Trend Continues

Overall, we expect the market will continue to be vigorous going into 2022. When we compare sales numbers from December 2021 with December 2020, there are many indicators: first, the average sales price has gone up significantly. Buyers are regularly purchasing over listing price, which was not the case in 2020. We’re also seeing fewer properties on the market, leading to more competition over the limited inventory. Finally, the number of days that homes are on the market has decreased significantly, telling us what we already know... which is that real estate is moving fast! 

Now that this has been the reality for a while, buyers are starting to embrace the competitive nature of the housing market. When we first started seeing this shift, people were hesitant to bid much over asking price, but now, buyers are beginning to understand that it will take a more aggressive approach to be the highest bidder on a property. One of the most important reasons to work with an experienced team is to have an agent with deep knowledge of the housing market and negotiation strategies that will work in a highly competitive environment. 

Higher Prices Aren’t The Full Picture

While we are seeing an increase in the average sales price, we are also seeing historically low interest rates. Lower interest rates contribute to greater buying power, because your money is focused on principal costs. Slight changes in interest rates dramatically change a buyer’s total costs over the length of their mortgage. This means that while home prices have increased, the incredibly low interest rates have helped to balance it out and in many cases have actually made buyers' total costs equal to (or lower than!) what they would have been a few years ago with the lower home prices and higher rates.

Interest rates are predicted to stay low through the spring, but are expected to increase come summer. What this will do to home prices remains to be seen, since once the interest rates rise and payments increase, overall housing affordability may become a concern and home prices may have to give in order to help even things back out.

The Perks of the Winter Market

If you're thinking of selling your home, winter is a great time to list because it brings out the more serious buyers. In warmer months, you tend to get people casually browsing for properties with no real plans to buy, but the folks braving snowstorms to see a home are generally committed to actually purchasing. You may see less activity or showings overall; however, you'll likely see more intent from the people who do view your home. A firsthand example: on one of our most recent listings in Essex, more than half of the open house attendees ended up putting an offer in on the property, which went under contract quickly and for well above list price - proof that you don't have to sell in the spring in order to get great results! So if you're thinking of selling, know that this is the perfect time of year to capitalize on the low inventory and target those serious homebuyers!

Who You Work With Matters

This is always true and especially so in a fast-paced and competitive market. Having an agent with a reputation for success, expert market knowledge, and strong relationships within the community can make all the difference between winning or losing out on the home you love or properly pricing your listing to get an above-ask offer. When choosing which team you'd like to partner with on your real estate journey, make sure to ask about their track record and what they plan to do to get you the results you're looking for.

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For more insights into the market or if you want to learn more about what we do at Templeton Real Estate Group, reach out or call 802.488.3487.