It’s looking more and more like 2022 is a much better time to buy a house — with one big catch

2225 NW Lakeside Pl, Bend, OR 97703
Presented by Tammy Caruso | Offered at $3,500,000 | MLS# 220134545

From businessinsider.com

Economists told Insider in July that 2022 will be an easier time for prospective homebuyers. New signs suggest that forecast is holding up.

The past 12 months have been among the hardest in history for American house hunters. A shortage of available units fueled bidding wars and drove prices higher at a record pace. Builders were slow to shore up supply. While the broader economy healed, housing became less and less attainable.

New data signals the chaos of the 2021 housing market is giving way to a more normal buying environment. The chasm between buyers’ demand and the market’s supply is closing, albeit slowly. And while economists expect prices to keep soaring next year, signs point to 2021 serving as the peak for the housing-market frenzy.

A few indicators hint that demand is already easing.

The Common Haus Price Index — which tracks asking prices for the popular three-bed, two-bath US home — slowed to a year-over-year rate of 5.4% from 5.9% last week, according to the housing economist Ralph McLaughlin. That marks the smallest one-year jump since January 2020, again echoing precrisis trends.

Prices have fallen more dramatically on a seasonal basis. The average price of the most common US home slid to $337,000 last week from $340,000. The latest average is now $26,000 below the 2021 peak of $363,000, the largest seasonal gap in data going back to 2012, McLaughlin tweeted Tuesday.

At the other end of the market, supply is bouncing back at the fastest pace since May. US housing starts leaped to an annualized rate of 1.68 million in November, according to Census Bureau data published last week. That beat the median forecast of a 1.57-million-unit pace.

Adding multifamily units into the mix makes for an even rosier outlook. There were nearly 1.5 million single-family and multifamily units under construction in November, according to government data. That combined figure is the highest it’s been since 1973.

The pickup isn’t likely to be a one-month boom, either. Building permits rose more than expected in November to the fastest pace since August. Though permits serve as just the first step in getting new homes to market, they are a leading indicator for residential construction. The increases in both starts and permits suggest supply will swing higher later in 2022 and beyond.

Even bidding wars are slowing down. Redfin has been keeping a competition index from its own real-estate professionals’ data, and 59.5% of home offers faced competition in November. That might sound like a lot, but it’s the lowest in 11 months, down from April’s high of 74.6%.

To be sure, it will take some time before the nationwide home inventory looks anything like it used to. The supply of active listings plunged 26% in the 12 months that ended in November, according to Realtor.com. The inventory of available homes is at the latest of several record lows, a whopping 55% below levels seen in 2019.

And the indicators of an inventory rebound and price cut are set to be unequal depending on the region of the country. The Sun Belt has boomed throughout the pandemic and shows no signs of getting cheaper anytime soon. Whatever houses hit the market there are sure to be snapped up quickly.

Redfin’s competition index bears this out. While the national rate has fallen into the 50% range, some markets face a much higher percentage of bidding wars, led by Richmond, Virginia (80%); Salt Lake City (73.8%); San Diego (72%); Honolulu (71.1%); and Dallas (70.6%).

In general, homes are still selling at a blinding pace. The average time homes spend on the market fell to 47 days in November, down from 57 days the year prior. Although the measure is swinging higher as the market settles into the slower holiday season, homes are still sold faster than in any November in recent history, Realtor.com said. Inventory might be bouncing back, but it’s not rebounded enough to normalize the market just yet.

Buyers will have to wait a little longer for home shopping to cool down, but 2022 should be a better time to buy, at last.

Full article at businessinsider.com


November Housing Starts Post Double-Digit Gains

12610 SE Deremer Ln, Happy Valley, OR 97086
Presented by Thomas Cale & Jason Mendell | Offered at $2,000,000 | MLS# 21008338

From housingwire.com

After dipping by 0.7% in October, housing starts were back up in November. They rose 11.8% month-over-month to a seasonally adjusted rate of 1.68 million units, according to a report released Thursday by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

Construction of single-family homes increased 11.3% to 1.17 million units, while the construction of multifamily units increased 12.9% to 506,000 units.

“Breaking an eight-year trend, in recent months there have been more single-family homes under construction than multifamily units,” National Association of Home Builders chief economist Robert Dietz said in a statement. “Moreover, despite some cooling earlier this year, the continued strength of single-family construction in 2021 means there are now 28% more single-family homes under construction than a year ago. These gains mean single-family completions will increase in 2022, bringing more inventory to market despite a 19% year-over-year rise in construction material costs and longer construction times.”

HUD and the Census Bureau are attributing this increase in production to strong demand for new construction. As housing inventory across the country continues to remain at historic lows, it comes as no surprise that many prospective homebuyers are turning to new construction.

November saw a decent increase in residential construction jobs with 4,100 residential building jobs and 6,200 residential specialty trade contractor jobs created. In addition, this rise in housing starts also reflects an increase in homebuilder confidence.

“Mirroring gains in the HMI reading of builder sentiment, single-family housing starts accelerated near the end of 2021 and are up 15.2% year-to-date as demand for new construction remains strong due to a lean inventory of resale housing,” Chuck Fowke the chairman of the NAHB said in a statement.

Regionally, on a year-to-date basis, combined single-family and multifamily starts are 24.4% higher in the Northeast, 9.6% higher in the Midwest, 15.4% higher in the South and 19.4% higher in the West, compared to the same time period a year prior.

Looking into the new year, overall housing permits increased 3.6%, with single-family permits rising 2.7% and multifamily permits rising 5.2%, suggesting that new inventory, in the form of new construction, will eventually hit the market, helping alleviate some of the crunch felt by such low inventory levels.

“The bottom line is we need more homes and it will take time to reduce the housing stock ‘debt’ in the face of growing demand,” First American deputy chief economist Odeta Kushi said in a statement. “But today’s housing starts report, in combination with a positive builder’s sentiment report, sends an optimistic message about the housing market as we enter 2022.”

Full article at housingwire.com


Looking To Move? It Could Be Time To Build Your Dream Home

3807 Old Lewis River Rd, Woodland, WA 98674
Presented by Brandy Pettet | Offered at $5,750,000 | MLS# 21300616

From Keeping Current Matters

While today’s supply of homes for sale is still low, the number of newly built homes is increasing. If you’re ready to sell but have held off because you weren’t sure you’d be able to find a home to move into, newly built homes and those under construction can provide the options you’ve been waiting for.

The latest Census data shows the inventory of new homes is increasing this year (see graph below):

With more new homes coming to the market, this means you’ll have more options to choose from if you’re ready to buy. Of course, if you do consider a newly built home, you’ll want to keep timing in mind. The supply shown in the graph above includes homes at various stages of the construction process – some are near completion while others may be months away.

According to Robert Dietz, Chief Economist and Senior VP for Economics and Housing Policy for the National Association of Home Builders (NAHB), “28% of new home inventory consists of homes that have not started construction, compared to 21% a year ago.”

Buying a home near completion is great if you’re ready to move. Alternatively, a home that has yet to break ground might benefit you if you’re ready to sell and you aren’t on a strict timeline. You’ll have an even greater opportunity to design your future home to suit your needs. No matter what, your trusted real estate advisor can help you find a home that works for you.

Full article on Keeping Current Matters


Inventory Hits 2021 High, Competition Remains Fierce

10720 S Moapa Ave, Portland, OR 97219
Presented by Matt Tercek | Offered at $1,599,000 | MLS# 21114701

From REALTOR® Magazine

Home buyers are finding more housing selections this fall, but they’re still up against some serious competition. Nearly one-third of the 50 largest metros saw increases in the number of newly listed homes compared to last year, according to a new report from realtor.com®.

“This September, buyers had more options than they’ve had all year and while that’s typical of early fall, that’s not what happened in 2020,” says Danielle Hale, realtor.com®’s chief economist. “Still, it’s important to remember that while buyers may have an easier time this fall than they did in the spring, the market remains more competitive than it has been historically at this time of year.”

“This September, buyers had more options than they’ve had all year and while that’s typical of early fall, that’s not what happened in 2020,” says Danielle Hale, realtor.com®’s chief economist. “Still, it’s important to remember that while buyers may have an easier time this fall than they did in the spring, the market remains more competitive than it has been historically at this time of year.”

The U.S. median home price continued to hold at August’s near record-high of $380,000. List prices are up 20.6% compared to pre-pandemic levels in 2019, realtor.com® notes. The top five markets with the highest price growth rate are in Austin, Texas (+33.6%); Las Vegas (+24.6%); Tampa, Fla. (+20.8%); Orlando (+16.9%); and Riverside, Calif. (+15.4%).

Some areas of the country are seeing more new listings added to the market than others. New listings have grown the most in competitive markets like Austin, Texas; Portland, Ore.; Jacksonville, Fla.; and Washington, D.C.—all with inventories up more than 10% year-over-year.

Meanwhile, the areas with some of the largest drops in newly listed homes in September tend to be in places that were affected by Hurricane Ida, including the Northeast (down 5.4%) and South (down 3.2%). New listings declined the most in the hard-hit area of like New Orleans, down 51.2%, according to realtor.com®.

Full article on REALTOR® Magazine


New Home Sales Rise for Second Consecutive Month

14949 SW Hat Rock Loop, Powell Butte, OR 97753
Presented by Carmen Cook | Offered at $1,850,000 | MLS# 220129823

From housingwire.com

Market supply reaches at a 6.1 month level.

Sales of new single-family homes in August increased 1.5% from the prior month, at a seasonally adjusted annual rate of 740,000, according to a report from the U.S. Commerce Department released on Friday. That’s the second straight month of rising sales for homebuilders, though there’s good reason to think the height of the frenzy is behind us.

Sales of new homes were down 24.3% from a year prior, and the median sales price of new single-family homes in August 2021 reached $390,900, 20.1% higher than August 2020.

“The housing market over the summer of 2021 appears to have settled at a level lower than the surge in the second half of 2020 into early 2021,” Ben Ayers, a senior economist at Nationwide, said in a statement. “Still, new home sales remain high relative to levels since the housing market crash and show continued strong demand from buyers.”

The number of new houses for sale in August 2021 (378,000) represents a 6.1 month supply of new houses at the current sales rate, according to the report. This is a 74.3% increase over August 2020 levels, and reflects the 17.4% increase in housing starts compared to a year ago.

Industry experts feel that this is a reflection of the steadying confidence among homebuilders, which remains high, despite a recent decline.

“Builder sentiment remains strong and housing demand is being supported by ongoing low mortgage interest rates and a shortage of existing home inventory,” Chuck Fowke, chairman of the National Association of Home Builders, said in a statement

Despite rising housing starts and steadying confidence levels among builders, the industry still faces some challenges including continued material and labor shortages. Because of the labor and material issues, many homebuilders have delayed putting up the number of new homes up for sale.

“The solid improvement in August sales does not mean that builders are in the clear — building material supply chain issues and labor shortages are still very real challenges that buyers and builders alike are eager to see resolved,” Zillow economist Matthew Speakman said in a statement. “It’s critical that builders continue to find ways to get around these existing challenges and bring new homes to the market in higher numbers, giving even marginal relief to would-be buyers exasperated by intense competition and limited housing supply.”

Nearly 80% of homes sold in August were either under construction or yet to be built.

“This report continues to highlight the ongoing difficulties that homebuilders are facing as they attempt to work through their current construction backlog, due to a shortage of labor and elevated material costs and outright shortages,” added Mark Palim, deputy chief economist at Fannie Mae.

Regionally, on a year-to-date basis, new home sales fell 1.0% in the Northeast and 2.3% in the West, but rose 4.4% in the Midwest and 4.5% in the South.

Full article at housingwire.com