Surprising activity in fall housing | Will It Continue?

Welcome to the October 2021 Housing Market Report. If you have been following this page this headline may not be surprising but it still feels strange actually experiencing the change in activity. Typically about this time we see a pull back in buyer activity and listings start to decline. After all fall is a time we start preparing for the holidays.

Diana really nails things on the head here. No one at this point can predict what will actually happen next. We can make some educated guesses with rates and home price appreciation. But what happens with inventory levels is truly a guessing game.

Home Price Performance Outlook

The first ‘guess’ that I want to share with you is the estimated home price performances that the experts are predicting. As you can see above 2021 is looking at finishing with 11.74% estimated home price performance. For 2022, we’re looking at 5.82% and then 3.94% in ’23, 3.56% in 2024, and 3.55% in 2025.

Here’s another way to look at that data looking forward. If you’re a buyer this is what you might realize if you made a purchase this year and sell in 2025.

Interest Rate Outlook

Now, the second point I want to bring up is mortgage rates and their projections. Right now in quarter four, we are looking at average of 3.18%. In quarter one experts predict we’re looking at 3.33%, quarter two, 3.45%, and in quarter three of next year, 3.55% interest rates.

So here’s the reason rates are expected to increase. Any news of tapering of bond purchases by the fed will have an upward effect in rates by the markets. And when the fed does actually raise their benchmark rates markets will in turn react by raising their rates even on just the news alone.

San Antonio home sales data

Moving on to San Antonio, which is where we are all most concerned. As you can see total San Antonio homes for sale has started to increase as the year winds down. This is not a normal pattern that we usually see. Typically we see a pullback in the fall as seasonal routines take hold. So this will continue to be an interesting pattern to monitor.

Looking back as far as 2018 you can see we have a long way to go before any normal amount of homes will be available. But for those looking to buy now. This news is good.

The other key metric we want to keep an eye on is supply of homes. This tells us how fast the current supply is being absorbed or sold in the market. For the last couple of months we have been flat and holding at around 1.4 months rate of supply. A normal balanced market is around 5-6 months. Notice where we were in 2018-2019. We have been in a seller’s market for some time.

Hopefully we will continue to see higher supply rate numbers into the fall and winter to help make 2022 a little less chaotic for home buyers.

Bottom Line

The market is at a crossroads right now.

Home buyers are facing higher interest rates coupled with higher sales price predictions. And sellers have a what looks like a unique opportunity to sell for top dollar in a fall market that normally sees prices retreat from summer highs. If you are thinking about a move let’s connect. Schedule a hassle free consultation here.

Owner/Principal Broker

Maverick Homes And Neighborhoods

Krishna Perkins