2021 Year End Reflection and Insights for 2022
As the winter season ramps up, and the sales season ramps down (temporarily for the holiday period), I thought it would be a great time to take a pause and reflect on the crazy highs and lows of the real estate market over the past year.
If you’re tuned into the news, you will know that the real estate market has been anything but ordinary over the past year and a half. Amidst the depths of the pandemic lockdowns, demand for real estate boomed with inventory falling to historical lows. Courtesy of offices shifting to a work at home model, people began considering upgrades to their homes, families relocated to be closer to extended families, and more.
For that simple reason, the spring market took off earlier than expected and the momentum has barely stopped – even as we approach the end of the year. This year alone, I’ve seen many records broken in my personal experience as a real estate agent:
- 10-20 offers on a listing became the new normal
- Witnessing a record-breaking 40 offers on a listing
- Two contracts escalating from 1.25 million to 2.0 million within a span of a few weeks
- And many more
Near the end of the summer, as fall approached, more listings flooded the market and the market seemed to experience a slight softening. While we have not exactly exited a sellers’ market just yet, the pressure for buyers is not nearly as crazy as when the year began.
Just to give an example, I recently was part of a bidding war with 11 offers in September. In contrast, I participated in bidding wars with more than 20 to 25 offers in early 2021. The silver lining here? Buyers now have a much better chance to compete for listings without going all-in as they would have had earlier this year.
Now, as we enter the winter season, agents are preparing for more. Historically, it has been common for the market to slow down significantly in the winter season, only gearing up after the end of January – particularly in the urban core. However, as 2021 has proven, it has not been a normal year. Almost every day now I have been out and about with buyers looking for a purchase and have been busy getting multiple listings ready for the market.
In my opinion, it doesn’t seem like the market is letting up any time just yet – maybe only for a short break around the Christmas holiday but not for much longer.
One of the most common questions I’ve been getting these days is “Is the market going to burst soon?”
My thoughts? With buyers that are much stronger from a credit standpoint and larger amounts of disposable income to spend, and stringent bank loan processes in place, I don’t necessarily think so.
While I cannot pretend to know the future, especially in an unpredictable market like the housing market, my predictions are that while the market may be slightly less competitive (like what we experienced in the fall this year), it will still be pretty much a strong seller’s market.
If you’re looking to buy or sell in the coming year, or have any questions about the current state of the market, feel free to reach out! The Scott Garnett team is here to help guide you through the process.