Your Q4 Housing Market Snapshot
The fourth quarter ended 2021 on a high note, continuing the trends of previous months and closing the book on what has been a banner year in residential real estate. Despite higher selling prices and higher interest rates, we saw sales of existing homes increase from October to December across the country. New listings and construction of new homes also increased, but at a somewhat slower pace. As supply chain issues are resolved, these new constructions will add much-needed inventory to an already competitive housing market, although it is uncertain to what extent these new homes may alter the trajectory of decline that we have experienced over the past two years.
Fourth quarter average selling prices rose from a year ago, rising 9.4% from $281,189 in 2020 to $307,751 in 2021. Buyer demand continues to rise and economists believe that all indicators of buyer activity will tend to increase. Additionally, the percentage of original list price received increased in the fourth quarter to 99.5% from 98.8% in the same period last year.
On interest rates, the Federal Reserve announced in November 2021 that it would scale back its bond-buying program to $105 billion in December, with further cuts leading to the target. zero net additions to the Fed’s bond portfolio by mid-2021. 2022. A series of interest rates are scheduled to follow this reduction. Source: Fed to start shrinking in December 2021 (investopedia.com)
According to Lawrence Yun, chief economist of the National Association of Realtors, interest rates should reach 3.7% by the end of the year. One silver lining to this increase: this rise in mortgage rates could reduce buyer demand and, therefore, create more choice for buyers who are still in the market to buy.
We’re available to answer all of your market questions and are ready to help whether you’re ready to list your home or want to buy a new home in the Kansas City area!
Bash & Co. Sotheby’s International Realty is an innovative, full-service residential real estate brokerage that leverages the latest technology to serve clients in the Kansas City area’s emerging, established and upscale neighborhoods. Follow them on Instagram here and on Facebook here.