Not only has 2021 seen the highest home prices of all time, 2021 has seen the lowest supply of for-sale houses of all time.

2021 Considered a “Remarkable” Year in Real Estate Market

According to Redfin, the 2021 real housing market has been “remarkable.”

Why “remarkable?”

  • The COVID pandemic and its resulting surge in remote working have altered where, when, why and how people buy owner-occupied homes.
  • Home-sale prices soared to the highest median ever while the supply of for-sale homes plummeted to an all-time low.
  • There was record demand for second/vacation homes, many of which became primary homes, in 2021.
  • More homebuyers relocated to different metros than ever.
  • And, and, and…

“The ongoing pandemic, including its seismic effect on the US economy and the way Americans live and work, has made 2021’s housing market anything but typical,” said Daryl Fairweather, Redfin’s Chief Economist.  ”Remote work, low mortgage rates, a shortage of building materials and wealth inequality that has allowed an influx of affluent Americans buy vacation homes, to name just a few factors, have come together to create a historic year for real estate.  Buyers paid more for homes, bought sooner than they planned, searched outside their hometowns or all of the above.  This year’s frenzied housing market has been one for the books – but it may become more balanced in 2022.”

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10 Housing Market Records Set in 2021

  1. National median sale price jumped to $386,000 in June 2021
    1. $386,000 = +24.4% y/y increase
    2. Median sale price may slash this all-time record before the close of 2021
    3. Home prices much higher than pre-pandemic in almost every part of US
    4. Double-digit home price growth throughout 2021
  2. Housing inventory plummeted to all-time low
    1. Just 1.38M for-sale homes in June 2021, a drop of -23% y/y
    2. Lowest home supply due to lack of new home construction, soaring buyer demand and homeowners wanting to leverage low mortgage rates to refinance rather than to sell
  3. Days on market (DOM) dropped to 15 days in June and July
    1. Lowest DOM in history; down from 39 days in June 2020
    2. Market speed due primarily to housing supply dearth
  4. Over 60% of for-sale homes went under contract in two weeks during March
  5. 5% of homes sold in June were sold above list price, a record high
    1. Comparatively, 29.6% homes sold above list price in June 2020
    2. Average home sold +2.5% above list price in June, another record high
  6. Average 30-year fixed mortgage rate fell to 2.65%, an all-time low, during week of January 7, 2021
    1. Low mortgage rates helped cause homebuying frenzy, record-low inventory shortages and soaring home prices
  7. Investors of all stripes bought 18.2% of all for-sale homes during Q3 2021
    1. Record high share of investor home purchases
    2. Investors bought record $63.6B worth of homes during Q3 2021
  8. Demand for second homes up +91% from pre-pandemic demand levels in January 2021
    1. Demand for second homes mirrored growth of remote work
  9. Nearly one-third of American population looked to relocate to different metro area
    1. Remote work and relative affordability were two factors spurring record relocations
    2. Buyers wanted larger houses, more outdoor space and warmer weather
  10. Typical top tier home sold for 25% more than in 2020
    1. Median sale price of lux homes jumped +25.8% y/y to $1,025,000 in Q2 2021
    2. Mid-priced homes sold for +16% y/y
    3. Affordable homes sold for +13.2% y/y

Thanks to Redfin.

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