Near-record December home sales cemented 2021 as the busiest year for home buying in the 14-year history of the RE/MAX monthly national housing report, while also setting records for smallest inventory and highest average home prices. On an annual basis, 2021 finished with nearly 10% more home sales than the previous record year of 2020. So, how does 2021 stack up against the hottest housing years on record?
Here is a quick snapshot of local housing data for Phoenix:
• Closed transactions : 8,836 down YOY by 7.59% / up MOM by 4.2%
• Median Sales Price : $430,000 up YOY by 28.36% / up MOM by 1.18%
• Days on Market : 25 down YOY by 10.71% / up MOM by 8.7%
• Months’ Supply of Inventory: .9 down by 18.2% / down by 10%
Across the 51 metro areas in the report, December 2021 home sales were the second highest for the month in report history, trailing only December 2020. Despite the strength in home sales, December sales defied recent month-over-month moves. December 2021 home sales were actually down 0.8% from November, which had an unusually high total. In contrast, the November-to-December average change for the five-year period from 2015-2019 was an increase of 3.5%.
“December capped a fantastic year for home sales. After a busy 2020, we expected 2021 to be even better – and it was,” said Nick Bailey, President and CEO, RE/MAX, LLC. “Buyers shrugged off all sorts of potential obstacles – high prices, record-low inventory, stiff competition for available listings – and kept things rolling the entire year.”
“The story of housing in 2021 was centered around high demand that led to a substantial increase in sales despite ultra-low supply. What’s promising for 2022 is that many of the factors which drove record sales in 2021 remain in place. Interest rates are still attractive, workplace flexibility continues, and many homeowners are sitting on a mountain of equity. If more of them become sellers, there’s ample reason to think the hot streak will continue. The past two years have proven that buyers are out there and ready to go.”
December home transactions could have been even stronger had it not been for record-low inventory. The year 2021 ended with the smallest number of homes for sale in the 14-year history of the report. December inventory dropped 23.6% from November – the previous record low – and 33.3% year over year. The 10 months with the lowest inventory in report history all occurred in 2021.
December’s 1.2 Months Supply of Inventory was an all-time low and tied the report record set in May 2021. There were two months supply of inventory a year ago. Homes spent an average of 31 days on the market in December – two more than November, but seven less than a year ago.
At the same time, December’s Median Sales Price of $335,000 was up 1.4% over November and 11.5% year over year. The November-to-December increase is slightly higher than the 1.2% average for the five-year period from 2015-2019. While the highest average sale price of the year typically is reached in early or mid-summer, October’s $340,000 was the highest in 2021 and in report history.
Highlights and the local markets leading various metrics for December include:
Of the 51 metro areas surveyed in December 2021, the overall average number of home sales is down 0.8% compared to November 2021, and down 6.9% compared to December 2020. The markets with the biggest decrease in year-over-year sales percentage were San Francisco, CA at -21.9%, Manchester, NH at -17.6%, and Atlanta, GA at -17.1%. Leading the year-over-year sales percentage increase were Wilmington/Dover, DE at +8.9%, Billings, MT at +8.3%, and Boise, ID at +8.2%.
Median Sales Price – Median of 51 metro median prices
In December 2021, the median of all 51 metro Median Sales Prices was $335,000, up 1.4% compared to November 2021, and up 11.5% from December 2020. No metro areas saw a year-over-year decrease in Median Sales Price while 32 metro areas increased year-over-year by double-digit percentages, led by Phoenix, AZ at +28.4%, Tampa, FL at +25.7%, and Raleigh-Durham, NC at +25.3%.
Days on Market – Average of 51 metro areas
The average Days on Market for homes sold in December 2021 was 31, up two days from the average in November 2021, and down seven days from the average in December 2020. The metro areas with the lowest Days on Market were Nashville, TN at 13, Cincinnati, OH at 16, and Omaha, NE at 18. The highest Days on Market averages were in Des Moines, IA at 92, Miami, FL at 76, and New York, NY at 71. Days on Market is the number of days between when a home is first listed in an MLS and a sales contract is signed.
Months Supply of Inventory – Average of 51 metro areas
The number of homes for sale in December 2021 was down 23.6% from November 2021 and down 33.3% from December 2020. Based on the rate of home sales in December 2021, the Months Supply of Inventory decreased to 1.2 compared to 1.4 in November 2021, and decreased compared to 2.0 in December 2020. A six months supply indicates a market balanced equally between buyers and sellers. In December 2021, of the 51 metro areas surveyed, zero metro areas reported a months supply at or over six, which is typically considered a buyer’s market. The markets with the lowest Months Supply of Inventory were Salt Lake City, UT at 0.4, and a three-way tie between Albuquerque, NM, Denver, CO, and Seattle, WA at 0.5.