Will Prices Continue to Rise in 2022?!
Will the start of a new year bring new market conditions, or will 2022 be more of the same? 2021 was a unique year for the Real Estate market in the Abilene area. We saw a record number of homes sold and a record-high average price!
In 2021 the Abilene area had 2,819 homes sold. And the average price was around 230,126
Compared to 2020 that is 104 more homes sold, and over a $26,000 increase in the average price. I think that needs repeating, the average price of homes sold increased TWENTY! SIX! THOUSAND! DOLLARS!
So, you’re probably wondering how prices increased so much. The simple answer is supply and demand! While we saw a record number of homes sold, the entire year we had an extremely low inventory of homes available. In 2021 we saw an average available inventory level of 1.2 months available. What this means is that without additional homes added to the market, the existing listings would all be sold after 1.2 months! To put this in perspective, a balanced market has 6 months of inventory available, and the Abilene market hovered around 3-5 months of inventory from 2012 to mid-2020!
That brings up the big question.
Why is there no inventory?
Many factors have contributed to our housing shortage, but the largest is that people simply aren’t moving. Research has shown that as of 2019 the average American family is staying in their home for almost 13 years! That is almost 4 years longer than in 2009. In 2021 we saw more families elect to stay in their current homes due to the pandemic, and economic uncertainty. Since the 2009 recession Texans have elected to stay in their houses longer than ever before, with entry-level homes leading this shift. In the years between 2009 and 2021, the amount of time a family lived in a house varied by the price of the home, with families in higher-priced homes moving more frequently. In 2021 that trend changed, and now people are staying put no matter what price, with the average Texas family living in their home for almost 78 months. That’s 6 and a half years in the same home!
When you combine these inventory shortages, all-time-low interest rates, and an influx of people moving to Abilene from out of state you get the fast-paced, competitive market we saw in 2021.
So now our focus moves to 2022! I have people asking me all the time what the housing market will look like in this new year, and to be honest, with COVID and other outside factors nobody can be certain, but based on the data we have access to, the market should stay hot due to the continued inventory shortage, and low-interest rates. The research team at Zillow is forecasting an 11% increase in home prices over 2022. So, Sellers, 2022 may be a great year to sell your home!
Buyers, don’t let this discourage you from making 2022 the year you buy a house! With interest rates expected to start increasing again, and the construction of several new neighborhoods we could see the market start to level off. The most important thing to have in this market is an experienced REALTOR! Our team of experienced agents is ready to help you navigate through this unprecedented market, so give us a call at 325-603-8110 or just message us on Facebook, or Instagram!