Real Estate Review and Forecast 2022

Real Estate Update as We Greet the New Year

By Marquesa Hobbs, Realtor   CNE | MRP

As 2021 comes to an end, we look forward into 2022, optimism is on the forefront as our economy and community continue to rebuild. The housing market on both a local and national level are rebounding; buyer demand, especially due to low interest rates and relative affordability remains high. The Market is leveling a bit over 2020, but when looking back thru the years over “normal” markets, we are still quite a bit ahead of before the pandemic.  Remember that excluding Sept 2020, sales are still the strongest since 2005 (Bill McBride, Calculated Risk).  We are still considerably outperforming the “normal market” of 2017-2019.

Real Estate Statistics for El Paso County for October 2021

• Active listings were up 12%, to 648 units (577 last year)
• Total # of new listings YTD is up 607 units (4.1%)
• The number of Sales were down 120 units (8.3%)
• Single Family Building Permits YTD were up 191 units
• List Price/Sales Price Ratio was 102.1%
• Average Sales Price jumped 18% & Median Sales Price is up 15%
• Average Days on the Market was 11 

  

  Some feel that the market may be adjusting; however, considering the lack of supply, the jump in sales price (average up 18%, median up 15%) and the highest sales price ever recorded in COS local MLS for a home at $8,000,000, the market looks to actually be ramping back up. As of November 21, there are 758 available homes on the market and nearly 270 of them are new builds. For the year, we have seen more than 15,000 new listings come on the market which is the largest number in the last 10 years. The massive demand certainly continues to push prices higher for the remainder of 2021 and will into well into 2022.

  National Overview

  Foreclosure Update

  Now that moratoriums have been lifted, foreclosures will rise, but nowhere near the volume of pre-pandemic years. Additionally, the average homeowner gained approximately $50,000 in equity this past year, presenting new options that leverage equity. Remember, that there were almost no foreclosures last year, and we are way behind “normal” numbers.

  Interest Rates & Prices on the Rise!

  As mortgage rates and home prices both continue to rise, affordability will be affected. The industry experts average out to about 5.1% appreciation next year compared to record breaking 18- 20% appreciation we’ve seen. The decelerated rate will allow more buyers to enter the market especially as more Sellers are gaining confidence to finally list. Additionally, builder inventory is finally starting to build as well.

  Are Mortgage Loans Decreasing in Volume?

  The actual number of mortgage loans are decreasing for refinance origination loans as interest is creeping up. However, new mortgage loans are forecasted to rise 9% in 2022. Remember that interest rates are still historically low!

  Should I Just Rent?

  With limited inventory, some consider renting. However, rental inventory is also low, and rent is rising; approximately 9.3% this year, the fastest increase in over 16 years.  Additionally, why pay someone else’s mortgage when you could pay yours and increase your financial portfolio?

  Home Sale Projections

  Home Sales are forecasted to enjoy a strong finish in 2021 and then potentially even exceeding that next year. This information supports the strength of the robust housing market nationwide as both Sellers and Buyers start to plan for the Real Estate strategies next year.

  Looking Forward

  We greet the new year grateful to live in a city where home value will continue to rise and our business community lends to a thriving economy. To understand more about today’s Real Estate market, or if you’d like a complimentary home valuation, please contact me direct