2022 Real Estate Trends
2020 and 2021 and going into 2022, have been the strangest years on record for the housing industry. (COVID has affected everything) An unprecedented housing boom increased throughout the 1990s and continued into the new millennium, and continues today thanks to relaxed credit standards, low interest rates, low unemployment and an insufficient housing supply. In 2021 we sold over 7 million homes in the US! That's the largest sales year on record!
In more than 100 U.S. cities, home prices have climbed at least twice as fast as household incomes since 1998, according to The Wall Street Journal with information from the economic consulting firm Economy.com. Home prices have risen nationally three times faster than incomes since the turn of the century, which has made home ownership more challenging for Americans than ever before.
In large cities like Atlanta, Las Vegas, Denver, Houston, Tucson and Charleston, S.C., home prices have outpaced income at an incredible rate. In Miami, for example, incomes have risen 16 percent, while home prices have increased 58 percent since early 1998. New York's Long Island suburbs have seen just a 14 percent rise in incomes as compared to an 81 percent increase in home prices. Boston home prices have gone up 89 percent, while incomes have increased only 22 percent. In our home town of St. Louis, we have seen some homes appreciate 20% in the past year! The Oakville area of South St. Louis County is one of those areas that shows significant gain in value this year over last year.
These factors have contributed to the challenge for first-time homebuyers. The demand for homes has not slowed in the St. Louis area for sure! People talk about home prices going down and becoming more affordable, but I don't see that happening as long as we have low interest rates, and growth of our population. Owning your own home is still an AMERICAN DREAM!
Allen Sinai, chief global economist of Decision Economics Inc is a little less optimistic than I am. He says "I have never seen an asset market -- whether it's stocks or real estate -- that has boomed to excessive prices ... without a serious downturn. I really doubt we will escape" without price corrections in some cities, he says. Howevver, to date, this has not happened! We continue to see rising prices in houses...as well as across the board inflation.
I truly believe home sales will continue to be strong, and 2022 will be another record year.
Low interest rates are a continuing positive trend of the housing market. Low rates average now right around 4% for the 30-year fixed-rate loans, the lowest since the 1960s. The escalation of home pricing may slow if our interest rates go up. But so far, the Fed has not raised them significantly.
St. Louis continues to be one of the best kept secrets in our country. Our cost of living is low, and our housing market is strong! We live in a beautiful city that has some amazing, wonderful people! I'm happy to be part of this town!