The Grant House
https://www.davidsoncommunities.com/the-grant-house
Top 10 Smaller Towns
Real estate has been challenging for many buyers this year, with home prices up sharply and inventory at record low levels. Some buyers may get a break in 2022, but it’s not likely to be in some of the nation’s smaller cities that have seen strong housing demand due to remote work during the pandemic.
The cities that are likely to see the strongest price increases and home sales are described as second-tier cities that offer better affordability and more space compared with the nation’s largest cities, according to a new forecast from Realtor.com. It based its forecasts on recent home sales as well as economic trends, such as unemployment and household growth.
Boise, Idaho, is again likely to be near the forefront in 2022, Realtor.com predicted. That comes after local property prices surged more than 30% in the third quarter, and Boise was named the least affordable housing market in the U.S. — with the city’s median home price jumping to almost $535,000, or 10 times the city’s median income.
Boise is attracting people who want to relocate from expensive tech hubs like San Francisco, people for whom those prices may seem like a deal compared with pricing in bigger cities. And that trend is likely to continue in 2022, said Realtor.com chief economist Danielle Hale.
“2021 was an ultracompetitive year for the real estate market, especially for smaller secondary tech markets. They benefited from knowledge workers being freed up from going into the office every day,” Hale noted. Next year will be “in many ways a continuation of what we saw this year.”
She added, “People are embracing the flexibility of the workplace and moving into areas that are more affordable.”
Most of the top 10 markets for 2022 have a “small-town kind of quality of life, yet they still have thriving local economies,” Hale noted.
Average home prices in the top 10 real estate markets are expected to jump 7.4% next year, or more than twice the national pace of 2.9%, Realtor.com said. Buyers may get a break next year with more inventory entering the market, relieving some of the low-stock issues that hampered home purchasers in 2021, Hale noted.
Many big cities like New York and Los Angeles are forecast to see price appreciations but may not match some of the smaller cities, according to the forecast. Prices in the New York metropolitan region, for example, are predicted to rise 2.3% in 2022, while home prices in the Los Angeles are likely to rise 4.8%, Realtor.com said.
Below are the top 10 markets for 2022, based on estimates from Realtor.com. Forecasts include the change in number of homes sold as well as prices for 2022 versus 2021.
1. Salt Lake City, Utah
- Predicted sales change: 15.2%
- Predicted price change: 8.5%
- 2021 median home price: $564,062
2. Boise City, Idaho
- Sales change: 12.9%
- Price change: 7.9%
- 2021 median home price: $503,959
3. Spokane-Spokane Valley, Washington
- Sales change: 12.8%
- Price change: 7.7%
- 2021 median home price: $419,803
4. Indianapolis-Carmel-Anderson, Indiana
- Sales change: 14.8%
- Price change: 5.5%
- 2021 median home price: $272,401
5. Columbus, Ohio
- Sales change: 13.7%
- Price change: 6.3%
- 2021 median home price: $298,523
6. Providence-Warwick, Rhode Island-Massachusetts
- Sales change: 8.1%
- Price change: 9.5%
- 2021 median home price: $419,813
7. Greenville-Anderson-Mauldin, South Carolina
- Sales change: 11.4%
- Price change: 5.7%
- 2021 median home price: $305,078
8. Seattle-Tacoma-Bellevue, Washington
- Sales change: 9.6%
- Price change: 7.5%
- 2021 median home price: $666,754
9. Worcester, Mass.-Connecticut
- Sales change: 8.4%
- Price change: 8.2%
- 2021 median home price: $397,188
10. Tampa-St. Petersburg-Clearwater, Florida
- Sales change: 9.6%
- Price change: 6.8%
- 2021 median home price: $335,814
Article includes a 2:30-min video of Boise market conditions:
https://www.cbsnews.com/news/10-top-housing-markets-of-2022-think-boise-not-new-york-city/
December Momentum
As hot as our market is right now, it sure seems like we will get off to a fast start in 2022!
The first house mentioned in this video is linked here. The LCV home was listed for $1,695,000 and closed for $2,000,000 for a 2,438sf tract house built in 2000 on a 9,198sf lot. The sale closed on October 21st:
The Dils
From Carlsbad, California!
Link to Wiki‘Lower Appreciation Not Yet Reflected in Gains’
More ivory-tower musings here, and it’s hard to believe that they could be so blind.
How can analysts read these statistics and decide that the frenzy will come to a complete halt, which is what a 2.5% YoY gain will feel like if it were to happen? Because of a break for the holidays?
That’s the best you got?
Predicting that there will be additional inventory for-sale when it’s been plummeting everywhere is naïve too.
At least their headline writer got it right:
‘Lower Appreciation Not Yet Reflected in Gains’
While it is clear that the growth of home prices has started to slow, reports on the results of the deceleration are diverging. Earlier this week Black Knight reported its Home Price Index (HPI) was up 0.6 percent in October, today CoreLogic puts the gain at 1.3 percent.
The CoreLogic report says its reported October appreciation is a full 1 percentage point lower than the peak posted for April. The annual rate of increase in the HPI for the October was 18 percent, identical to the 12-month growth it reported for September, and the highest recorded in the 45-year history of the index. Incidentally, in April the annual increase was 13 percent, showing the rapid run-up of prices over the summer and early fall.
Detached properties(i.e., single-family residences) continue to appreciate at a much higher rate (19.5 percent, also a record high) than attached properties at 12.9 percent. This also differs substantially from the 11 percent gain for single family homes reported by Black Knight which also reported that condo prices are now rising faster than those for single-family houses.
Price gains remain strongest in the Mountain West, with Arizona and Idaho again topping the charts with growth of 28.8 percent and 28.7 percent, respectively. Utah was third at 24.5 percent. Twin Falls, Idaho had the fastest growth among metros at 35.8 percent, but the South did weigh in. Naples, Florida was second at 33.5 percent.
Despite affordability challenges, a recent CoreLogic consumer survey shows that over half of respondents across every age cohort said that owning a home has always been a goal of theirs – further supporting the outlook that consumer desire for homeownership remains.
“New household formation, investor purchases and pandemic-related factors driving demand for the limited supply of available for-sale homes continues to propel the upward spiral of U.S. home prices,” said Frank Martell, president and CEO of CoreLogic. “However, we expect home price growth to moderate over the near term as many buyers take a break for the holidays.”
CoreLogic’s forward looking HPI projects that slowdown to result in a year-over-year increase of only 2.5 percent by next October “as affordability and economic concerns deter some potential buyers and additional for-sale inventory becomes available.”
Frenzy Monitor
The reason for breaking down the active and pending listings by zip code is to give the readers a closer look at their neighborhood stats.
Our Big Three zip codes – where you can still buy a decent house for $2,000,000 – are still having more pendings than actives (highlighted below), but let’s note how strong the pending counts are in La Jolla and Rancho Santa Fe too:
The median list price in La Jolla today is $5,422,500, and in RSF it is $7,700,000!
We can also track the average market times too. Upward trends here would indicate market slowing:
All four categories have improved recently, and the high-end $3,000,000+ average market times have been in the tightest range over the last few months!
Some may call this the off-season, but the only reason that the numbers aren’t any better is because the number of new listings is so low. Brace for impact in 2022!
Manhattan Views
We did get to spend the Thanksgiving weekend in Manhattan with Kayla. She cooked a good old-fashioned turkey dinner at home on Thursday, and the next day we visited the new tourist attraction on 42nd Street adjacent to Grand Central Station. They run you up to the 92nd floor where most of the younger folks are posing like a Kardashian – with some bringing their own pro photographers!
The view looking towards downtown (and Brooklyn to the left):
Looking west across the Hudson River towards New Jersey:
42nd Street below, and New Jersey in the distance:
Pivoting to the right, this is looking up Madison Avenue towards Central Park, Harlem, and the Bronx:
Looking east towards the Chrysler Building and the United Nations, with Queens in the distance:
Happy Holidays!
Inventory Watch
Virtually all of the ivory-tower crowd thinks that pricing will settle down in 2022.
They should take a good look at how 2021 is wrapping up.
Admittedly, the San Diego market is at the extreme end, with our inventory enduring the biggest YoY dropoff anywhere in the country. It’s been that way around here for months, and the NSDCC stats for November show how explosive the pricing can be when buyers are starved for quality homes for sale:
| Year | ||||
| 2019 | ||||
| 2020 | ||||
| 2021 |
The median sales price is 32% higher than it was 12 months ago, and 56% higher than it was two years ago!
We thought that the last half of 2020 was the frenzy of all-time, mostly because there was ample inventory that enabled home buyers to set monthly sales records.
But the second half of 2021 has been experiencing a radical pricing frenzy, with the November LP:SP ratio at a whopping 105%! The median sales price is $100,000 higher than the median list price? Wow!
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Staging in 2022
Buyers need to be sold twice – online and in-person. Staging helps with both!
La Jolla Realtor Michelle Silverman can easily tick off the various homes she’s sold for which she got more and higher offers because of effective staging.
“There was one home that hadn’t been staged and was listed at $1.149 million. It was old. It was tired looking,” she said. “I took the listing and had it staged. We got 12 offers on it and ended up selling it for just a little over $1.15 million. So, maybe it was just a little higher, but the buyer said they were only going to get $900,000 for the house.”
According to a 2020 survey of 13,000 staged homes by the Real Estate Staging Association noted that staged homes sell faster, averaging just 23 days on the market. By comparison, the typical U.S. home spent 43 days on the market last month, according to a report from Realtor.com.
The staging association survey also showed that with an average investment of 1 percent, approximately 75 percent of sellers saw a return on investment of 5% to 15% over asking price.
And this was before the market got as heated as it is now.
So, you might ask, if we’re in a seller’s market, why bother staging a home? Why not save the expense?
Silverman’s response was quick.
“Because even in a seller’s market, buyers are not visionary.”
