By: Liz Moore
There May Never Be a Better Time to Sell Your Home.
The primary factors that are influencing both national and local real estate markets right now – low supply and high demand – have converged to create an incredibly favorable market for sellers. This is particularly true in our local market, where additional demand has been fueled by the pandemic; buyers who now work remotely and can accordingly choose where they live and no longer be restricted by a commute, are finding the Peninsula a highly desirable place to live.
Sellers in 2021 enjoyed peak pricing, with the median sold price up 8.7% over last year on the Peninsula. That was enhanced by multiple offers in many instances. At Liz Moore & Associates, we pride ourselves on being students of the market, and we monitor the trend of the number of properties that sell over asking price. That was almost 60% of the market at its peak in June, and still 39% at the end of the year.
My crystal ball says that the favorable trend for sellers will continue well into 2022. The only 2 things likely to slow the train down are an increase in interest rates, which will take some buyers out of the market, and an influx of listing inventory, creating more competition. I do believe that both of those things will happen in 2022, but most likely not until the 2nd or 3rd quarter.
So, What Does This Mean for Buyers?
Buyers have had a tough go of it for the past 2 years. When there are 5 offers on a new listing, only 1 buyer is successful in their bid, leaving 4 disappointed and still looking. However, historically low interest rates are a compelling reason to stay in the game, and also inspire a buyer to pay over asking to win the bid on the property they really want.
Closed sales on the Peninsula were up 19.1% in 2021 over the prior year (and 42% at Liz Moore & Associates Newport News Branch), so that’s good news. We believe the key for buyers to win in the current market climate is to hire a great agent. And, while that may sound self-serving, it’s true. Experienced agents who understand the market, have solid relationships with the other agents, and who are savvy negotiators will make the difference for a buyer to be successful.
I predict that sales will drop slightly in 2022. So says Lawrence Yun, the Chief Economist for the National Association of REALTORS, and I agree. Although there is plenty of demand out there, inventory is simply so low (hovering around a 1-month supply as of this writing) that it will keep a lid on the number of sales.
Real Estate is a Great Hedge Against Inflation.
If you invest $30,000 in the stock market, and your annual return is 7%, then you’ve earned $2,100 (which is a lot better than you’ll do in a regular savings account in the bank!). Invest that same $30,000 as a down payment on a $300,000 home, and if it appreciates 7% in a year, then you’ve earned $21,000 – 10 times more! That’s the benefit that the leverage of real estate affords.
This is a great time to explore investing in real estate; your portfolio can guarantee your retirement, or it can get your kids started on building lifetime wealth.
Don’t let the intense market intimidate you. If you want to take advantage of the sellers’ market and the low interest rates to move up to a dream house for instance, don’t let the challenge of buying stop you. Your Liz Moore agent can help you formulate a strategy, and combined with a little patience, we can make it happen.
In 2008, we all wished we had sold our homes back in 2005. Where will you be in 2025?
*All stats based on Broker Metrics for REIN MLS areas 101-113 residential home sales in 2021.