Hello! I’m Shu Chen and I am here to talk about home sales and buyer competition in 2021.
2021 was a strong year for the U. S. housing market. Home price appreciation was in the double digits and sales volume was near pre-pandemic levels.
Figure 1: Existing Home Sales Rebounded in 2021
According to CoreLogic Multiple Listing Service data, existing home sales in the U. S. increased 7% in 2021 compared to 2020. In addition, homes were sold more quickly and more often at a price above the list price.
Home sales rebounded in 2021.
Home sales rebounded the most in the metros that were hit hard by the pandemic.
Figure 2: Sales Increased Across U.S.
Sales in Los Angeles increased over 30% in 2021 compared to 2020, after decreasing 9% in 2020. Markets like San Diego and Denver, where total sales did not drop in 2020, continued to show sales growth in 2021.
Homes sold fast and more often at a price above the list price.
With limited supply of homes listed for sale, buyers acted fast in 2021, and homes did not last long on the market. Median days-on-market before pending was 28 days in 2019. It dropped to 20 days in 2020 and further decreased to 10 days in 2021. Incented by historically low mortgage rates, home buyers were willing to pay premiums for their dream homes.
Figure 3: Half of the Home Sold Above List Price
In 2021, over 60% of the homes were sold at or above list price, almost double the pre-pandemic level. In Denver, almost 75% of the homes were sold at or above list price in 2021, with home buyers paying a 2.5% premium on average and the median days-on-market before pending was only 5 days. Price competition is less in markets with more homes for sale. For example, only one third of homes were sold above list price in Miami where the median days-on-market before pending was 32, and buyers were able to negotiate a 4% discount on average in 2021.
Expected increases in mortgage rates and high home prices could lessen home buying demand in 2022.
We expect the housing market to remain strong in 2022. Expected increases in mortgage rates and high home prices could lessen home buying demand. In addition, new home construction could help ease supply pressure, which would moderate buyer competition in 2022. Home prices are expected to rise, with the pace of appreciation slowing throughout the year.
Thanks for watching. For more insights on recent trends in the housing and mortgage markets, please visit CoreLogic.com.