2021 year end sales prices ended up at $360,000 median sales price and $506,033 average sales price. The year end median sales price rose 24.6% while the average sales price rose 28.2% The year end sales price is an average of all the sales that occurred in that year and is compared to the average the previous year.
Last week we wrote about how December median sale prices rose 27.6% over 2020. It is always interesting to view the month price change in context with the yearly price change. It appears home prices sped up in the 4th qtr. which helped propel the yearly to the 24.6% price gain.
The question becomes, will the rapid price growth continue or will prices stall? We saw institutional investors come into the market and buy up as much inventory as they could. They turned these properties into rentals and raised the rents. This put pressure on renters and first-time home buyers alike.
With Wall Street reaching record highs and retreating, will institutional investors keep paying top dollar for residential real estate going forward? They may, but if the economy turns in the 2nd half of 2022, they may not be willing to spend as much. If institutional investors pause buying and normal buyers are hit with recession, the real estate market could become interesting.
Florida sits in a better position than many states, but you must wonder if homes become harder to sell up North, will the money keep flowing to Florida like it has in years past? Even if money does continue to flow, at what rate? Will we see 25% price gains going forward?
25% appreciation rates are unsustainable, and if you have them for too long it is a matter of time before things go back the other way. Some sellers are questioning whether now the time is to sell. The answer is probably homeowner and situational specific. Additionally, nobody knows how much more upside is left in this market and for how long.
All we can say is it is more fun to sell right now than buy. Listing inventory is low. Sellers usually wait to sell until they see the market turn, and by then it is too late. Have you ever heard the term “You never want to catch a falling knife”? Buyers do not like to buy when the market is falling. They prefer to wait when the all-safe is given, which means the market begins to go back up.
Some people will always need to buy, and others will always need to sell no matter what the market is doing. It is the discretionary seller that may be holding out for one last sign the market is peaking. Stock analysts always advise not to time the market. Rarely will you get it exactly right, and only in hindsight will you know if you did.
If your home does not work well for you, or if you have better uses for your equity, now might be the time to explore your options. Do not sell just because the market is high. Have a plan. Who knows, the market may go higher in 2022. However, do not hold something that doesn’t work for you simply because the market went up in the past. Just because it went up last year does not mean it will go up this year. If your home is not ideal for you, let’s sit down and talk about your options.
Call Sande or Brett Ellis 239-310-6500, or visit www.SWFLhomevalues.com to get an Instant and Free online valuation.
We can discuss your options and help you make better decisions for your family. This may be a generational wealth decision for your family, so let’s get this decision right.
Good luck and Happy Buying and Selling!