Not even a blip, January 2022 real estate market picks up where December 2021 left off

There was not even a blip between where the 2021 real estate market left off and the 2022 real estate market begins with existing home sales reaching their highest level since 2006. The National Association of REALTORS® (NAR) reported sales were up 8.5% compared to the previous year as homebuyers rushed to take advantage of historically low mortgage rates.

Had rising sales prices and a shortage of homes for sale not forced many buyers to put their home purchasing plans on hold, home sales likely would have been even higher.

According to NAR, existing home inventory nationally was under 1 million at the start of the new year, yet another record low when compared to 1999.

But for many buyers, 2022 marks a new opportunity to make their home purchase dreams a reality, but it won’t be without challenges.

Competition remains intense and affordability continues to decline as inflation, soaring sales prices, and surging mortgage interest rates reduce purchasing power. The sudden increase in rates and home prices means buyers are paying significantly more per month compared to this time last year, which may cause sales to slow as more buyers become priced out of the market.

The January 2022 numbers from Valley MLS follow a similar pattern:

• New listings increased 7.4% for single family homes, and 22.6% for townhouse/condo homes.
• Inventory decreased 13.6% for single family homes, and 41.3% for townhouse/condo homes.
• The median sales price increased 16.9% to $277,726 for single family homes, and 4.6% to $205,000 for townhouse/condo homes.
• The average sales price increased 17% to $302,064 for single family homes, and a whopping 22.9% to $232,190 for townhouse/condo homes.
• Days on Market decreased 35.7% for single family homes but remained flat for townhouse/condo homes.
• The housing affordability index fell 15.1% for single family homes, and 5.9% for townhouse/condo homes.