2021 Remarkable Year For Real Estate in the Greater Phoenix Metro Market! 2021 Saw the Highest Sales Volume in our history according to ARMLS Statistics. (Arizona Regional Multiple Listing Service) Despite being in the second year of the pandemic our real estate market continued to set records!
ARMLS STAT: 2021 in Review. 2021 Remarkable Year For Real Estate
“We began 2021 in the throes of a pandemic with record-setting home sales metric. We ended 2021 the
same way. As the pandemic trudges forward, ARMLS is happy to report its best year on record, shattering every housing metric 2020 established and then some.
There were a few questions entering 2021, most notably, what would happen when the foreclosure and eviction moratoriums ended. But these were never really questions in our mind with 2021 playing out as anticipated. In our analysis, we anticipated a trickle at best but never a flood of new listings with the moratoriums ending. As 2021 concluded, not even a trickle materialized. 2021 reported the lowest foreclosure activity on record.
Regarding prices, in last year’s year in review, we shared the following quote from Michael Orr of the
Cromford Report, “Buyers cannot be blamed if they’re in despair about the lack of supply. We have less than half the number of active listings without a contract than we had a year ago. This time last year (2019), we described the lack of supply as shocking, so what do we call the current situation? We saw more new listings arrive during 2020 than during 2019, but only 1.4% more.
The annual sales rate increased by 6%, so the extra supply proved thoroughly inadequate in the face of demand. Prices have accelerated due to the huge imbalance between supply and demand, yet we have only seen part of that reaction. Sales prices are a trailing indicator and lag the leading indicators by up to 15 months. We can therefore expect to see prices move even higher during the next 12 to 15 months with appreciation rates possibly rising over 20%.” Michael put the hammer on the nail as the median sales price rose 28.23% between December 2020 and December 2021.
At the start of every year, there are always conversations about what the next year will have in store and the unknowns that may play a part. There are always many housing predictions ranging from a crash to a boom. It’s called human nature, and this year is no different. Heading into 2022, new conversations emerge around inflation, the potential impact of rising interest rates, and the continued active presence of Wall Street monies and their impact on our market. But that’s what these are, unknowns. The potential rise in interest rates will be a hot topic this year.
But predicting future mortgage rates is a fool’s errand. For the last four years, the expert consensus was for rising interest rates. In each of those years, the interest rates fell, however. Interest rates, inflation, heavy Wall Street activity in our market could impact our housing market in 2022 in subtle or maybe even not so subtle ways. Right now, it’s all just speculation.
What we do know, we begin 2022 with the lowest number of active listings at year’s end on record. And, while we all know the 28% year-over-year increase in the median sales price last year is unsustainable, there is nothing holding back continued price gains in the short term. We know a change is coming, but there are two questions I can’t answer: When will our market moderate? Where will the increase in supply come from? We do know, it isn’t going to moderate tomorrow. New construction and distressed sales will not increase our supply as new construction did in 2004 and 2005, and distressed properties did in 2009, 2010 and 2011.
2021 Remarkable Year For Real Estate It’s time for your year in review records:
• Highest year-end sales volume sales volume: 104,850
• Highest year-end average sales price: $528,940
• Highest year-end gross dollar sales volume: $51.763 Billion
• Highest year-end median sales price: $427,000
• 11 consecutive years with year-end gain in the median sales price
• The number of new builds sold in Maricopa County declined this year after increasing 6 straight years
• Lowest foreclosure activity in history
• iBuyer and institutional investors both increased their activity in 2021
• Zillow left the iBuyer market
• Highest year-end sales volume sales volume: 104,850
2021 saw the highest sales volume in history, as reported by ARMLS. The 104,850 sales surpassed 2005’s previous record. It should be noted that when viewing public records data, 2005’s total is and will remain the undisputed champion for the foreseeable future. In 2005, there were a significant number of new builds sold that were never listed on the MLS.
The number of new builds sold in Maricopa County declined this year after increasing six straight years.
Labor and supply chain issues have been blamed. 2022 will offer further insight.”
Newly Built Sales in Maricopa County by Year via Public Records
National Real Estate News
Can New-Home Starts Maintain 2021 Highs?
Builders ramped up construction on new homes last year as buyers eagerly sought more housing options. Single-family housing starts jumped 13.4% in 2021 compared to 2020, the Commerce Department reported Wednesday. But builders say supply-side challenges pose challenges to keeping that pace in 2022.
In December, builders pointed to supply challenges as the main culprit behind a 2.3% month-to-month decrease in single-family construction.
A shortage of homes for sale among the existing-home market is prompting more consumers to consider new-home construction. Builders say buyer demand has soared over the past year.
“The double-digit gain for single-family starts in 2021 was a continuation of the rebound and expansion of home building that took place in the wake of the pandemic,” says Robert Dietz, NAHB’s chief economist. “However, as mortgage interest rates are rising and construction costs increase, affordability headwinds are steepening. NAHB’s outlook for 2022 calls for relatively flat conditions for single-family construction, with additional gains for multifamily and remodeling.”
Builders Add Escalation Clauses to Offset Lumber Prices
Builders Passing On Increasing Costs to Consumers. What Do You Do If You Don’t Know The Cost Of Your Home? How Long Can You Lock An Interest Rate? Can you extend your Interest Rate Lock and how much will it cost? Will You Actually Be Able To Afford Your New Home When It Is Finally Completed At Some Unknown Future Date? Will You Possibly Lose Your Deposits?
Check Your Builder Contract to see if they have a clause that allows them to cancel your contract without cause. The real cause may be they can secure a much higher price from a new buyer. Some of our local builders are delaying the release of homes available for sale. Their stated reason is they want to be able to deliver the home to the new buyers in a timely fashion. The more realistic view may be the builder doesn’t know the costs involved for supplies and labor if the date of completion is too far out. Therefore, they don’t know the price to charge the buyers.
Pandemic Foreclosure Tsunami Not on the Horizon
Nationally 87% of homeowners facing foreclosure have positive equity positions. Meaning they could sell the home at a profit, pay off the mortgage debt and fees rather than allowing the foreclosure to take place. Arizona Homeowners have gained more equity in the last two years than most areas of the country. Arizona is a Non-Judicial Foreclosure State, which means the foreclosure process does not go through the courts and is much faster. If you are facing foreclosure talk to a real estate professional as soon as possible to discuss your options.