Happy New Year, neighbor! I hope 2022 is off to a good start for you and that you’re happy and healthy. Jared and I are both getting back to work and hoping for another great year ahead.
Overall, December of 2021 was a great month for home sales throughout Lochwood. Twelve home sales closed with an average of 5 days on market before going under contract. Six of the sales were at 100 percent or more of the seller’s asking price. Seven of the twelve homes that sold were listed for $500,000 or more, which accounts for the large increase in the median sale price.
As of the writing of this letter, January 13, there were 4 home sales pending (later stage of sale process), and 3 other homes under contract (earlier stage of sale process). This means that we’ll likely have around 8 sales in January, which is in line with the number of sale recorded in January 2021. Essentially, sales are still strong.
The topic most industry analysts are talking about right now is the sustainability of the massive price appreciation that was gained in 2021. For all of North Texas, home prices were up 21 percent, year-over-year. That’s record setting appreciation and unsustainable for a few reasons. First, interest rates, the cost of borrowing money to purchase a home, has gotten more expensive in recent weeks and more rate hikes are expected to help counter rising inflation. When it costs buyers more to borrow money, it typically decreases the total amount they can pay for a house. Additionally, wages and income have not increased enough to offset the increase in housing prices. Once again, affordability has become or is becoming an issue for home buyers. This also happened toward the end of the last cycle in 2017. Lastly, the in-migration of residents from other states is likely to wane in 2022, which means fewer buyers in the market for a new home.
Let me be clear here, I am not saying that we’re in a housing bubble or that prices are going to crater. We are actually in a very healthy market in terms of the down payments buyers are making on their mortgages. In fact, down payments are higher than ever. We also have too little inventory for there to be much shift in supply. I’m simply saying that we will continue to see price appreciation in 2022, but not likely at the levels achieved in 2021.
What does this mean for you? It means if you want to take advantage of a strong sellers market, then you probably need to make a move sooner than later. Call me, and let’s discuss your options and how to best take advantage of current market conditions!
That is all for now. I hope you find this information helpful. Feel free to reach out with any questions your might have. I’ll be in touch again next month.