Strong year of home sales on the horizon in 2022
As we close out 2021, hopefully with our loved ones, we are taking one final look back at home sales for this year before we turn the calendar and embark on the next chapter in our industry.
2021 took us on a wild ride as we got a peek at the possibility of new seasonality trends. It was also proof that people’s need for a great home to live their lives, raise their family, and now work, is resilient against almost all other things.
Since October we’ve also been predicting that we will see 6.8 million home sales this year. The last time we saw a year of higher home sales was back in 2005. It’s almost hard to believe after a year of non-stop talk about inventory shortages that the result will be a historic number of transactions.
So what does all of this mean for 2022? First, let’s take our last look at 2021.
In November, there were 536K home sales, which was 4% more than we predicted. The result was a 6% decrease in sales from October, but a 2% increase year over year. While we historically see a 2% increase YOY as we saw in 2018 and 2019, in 2020 there was a 24% increase YOY, which means November stayed a hot month even not in the height of a pandemic.
December & January
In this final month of 2021, we predict there will be 545K home sales in December which would be a 2% increase from November. In January we predict we will start the year strong with 515K home sales, which would be a 5% decrease from December, but a 27% increase year over year.
Ringing in 2022
As we look ahead to 2022 there are a number of things to consider that will impact transactions. One of the main areas we are paying attention to is inflation, and specifically wage inflation.
As home price decelerates, wage inflation will likely increase affordability therefore causing another strong year of transactions across the country. That’s not to say that all markets will be affordable, but the wage inflation (arguably caused by corporations like Amazon setting the new standard for wages) will have an impact on new homebuyers coming on the market especially in more affordable communities.
Something else that will likely impact the rate of home sales is the Great Resignation. Coldwell Banker recently released a study that revealed the impact the Great Resignation will have on the housing market, particularly in more affordable areas of the country. Around the country workers have indicated they would take a pay decrease in order to live in a more affordable area of the country. So what will that mean for inventory and transactions?
Ultimately, we predict with the deceleration of home prices, wage inflation, and for the foreseeable future, continued low-interest rates, 2022 could be another record-breaking year for home sales.
What role do you play?
As more and more ways to buy and sell homes emerge on the market, one thing remains true – buyers and sellers need a trusted advisor. The most recent data from NAR in 2020 stated that “87% of buyers recently purchased their home through a real estate agent or broker” (source). That means 87% of home sales are dependent on all of you.
Continue to nurture your sphere. Be the first person someone thinks of when they are ready to buy or sell, or, even before they are ready. You have the power to make a difference for your clients, your community, and the industry as a whole.
See you in 2022!
The Home Sales Predictor is a set of prediction data that dives into the number of presentations created and the correlated number of U.S. home sales. This data is provided by MoxiWorks with insights from their MoxiPresent product.