The 2021 real estate market was a good one. The housing market had an outstanding year with properties selling at record high prices, fewer foreclosures, and the highest sales seen in the past 15 years. Whether people benefited or not depends on if they were sellers or buyers.
Let’s take a look at the 2021 real estate market.
A Good Year for the Sellers
It was a beneficial year for the sellers. According to reports by the Federal Housing Finance Agency, house prices skyrocketed by 20%. In hot markets, this jump was even higher. This is the largest annual home price increase observed in the market’s history.
The houses didn’t only sell at a record high price but also at a record pace. Sellers were flooded with competitive bids even on homes that require a lot of rehab costs. They received well above the asking price, making it an outstanding year for them.
However, it isn’t the same story for the buyers. Although the mortgage rates at the start were low, finding a home to buy was a feat on its own. The cherry on top was the extremely stiff competition. Many prospective buyers were left disappointed.
Fluctuating Mortgage Rates
The mortgage rates fluctuated throughout the year 2021. At the start, the interest rates observed were the lowest on record. The average rate for a 30-year mortgage stood at 2.65%. It later rose to 3.05% at the end of the year.
With the federal reserve moving to end the pandemic monetary policy to reduce inflation, the prices are expected to increase. Inflation coupled with high mortgage rates made it difficult for some buyers to quickly make offers.
Low Availability of Homes to Buy
With people clamoring to buy properties, the spring homebuying season was busy. But even with sellers willing to sell their homes, the inventory was tight. So much so that investors were going to extreme measures to purchase their preferred choices.
The house buying madness had no end with buyers offering thousands of dollars to competitors, paying a million above the asking price and a homeowner in Maryland received 76 cash offers after putting their house on the market.
The total number of properties available for purchase decreased 19% in 2021 for houses under $200,000, while there was a 40% increase in houses over $600,000.
Problems for the First-Time Buyers
First-time buyers in 2021 got the short end of the stick. All out-cash offers, competitive bids, and constantly rising prices pushed them out of the real estate market.
By November, first-time buyers had dropped to 26% from the 32% they were in 2020, as stated by the National Association of Realtors.
Looking to Invest in Real Estate 2022?
2021 was a good year for some while others lost out. However, the new year will bring new opportunities. If you’re looking to invest in the real estate market in 2022, contact Insula Capital Group.
We’re a private investment company helping several investors in New York by providing them with different types of loans. Our services include fix and flip hard money lenders, hard money construction loans, private financing, etc.
Reach out to us to learn more about our real estate loan programs.