The Truth About The 2022 Housing Market | November 2021 Update
Welcome to the November Housing Market Report, 2021. Lately, we have been focused in on the inventory levels and we’ve been watching those slightly tick up in different areas of the San Antonio market. One of the key indicators we use to predict future sales is the Showing time Index.
This is basically the measure of buyer foot traffic in homes.
Buyer foot traffic
First up you will notice 2020, pre-pandemic where the two red bars indicate covid lock down. And then right after that, we had that huge surge of foot traffic, and then we had another huge surge of business in January 2021. Later we peaked in March and April, and now foot traffic has been tapering down ever since.
The dotted line here on this represents the mean or average for regular market and it’s really still above what we saw pre-pandemic.
Next, comparing the past 5 years in September look at 2017 to 2019. All three really good, solid years for real estate, still a seller’s market, particularly here in San Antonio.
And then 2020, we see the huge spike of business that we talked about in the last graph. Then again in 2021, another spike of business with some tapering down in traffic now.
Yes, the market is changing, we are seeing a shift, we are tapering down, but we’re nowhere near where we began this journey.
We will continue to keep an eye on this and we expect maybe some more tapering through 2022, but overall we’re not looking at a huge market correction at least in the San Antonio area market.
2022 Home Sales Forecast
Let’s look a little further in this data. Home sales forecast by Fannie Mae, Freddie Mac National Association of Realtors and Mortgage Bankers Association is predicting that we’ll finish this year above 6.5 million homes sold. That’s above what we sold in 2020
2022 they are predicting here, again, eclipsing 6.5 million homes sold. Even higher actually is your asking Mortgage Bankers Association whom is predicting 7.5 million!
And that translates into what’s next, more foretasted home appreciation. And the home appreciation looking forward around the country is 5.1%.
It’s not the double digits that we saw this past year, but it’s still above average appreciation. Typically, we’re looking at around 3% appreciation per year in a ‘normal’ market year and so it’s going to be an above average year for price appreciation going in 2022.
San Antonio Home Sales Stats
Locally in San Antonio 2020, we had about 6% appreciation, and then in 2021 we’re at 15%. That’s quite a big jump there. Many people were forced to accelerate their moving plans as a result of the pandemic. Others that planed to to move to other markets less affordable such as Austin made the switch to the San Antonio market.
Local Home Supply
As you can see from the above sample in and around San Antonio supply is still nowhere near decent level for home buyers despite any new inventory influx.
So, where are these people coming from predominately? If you ask Redfin which has tons of data Houston, Texas from in the state and Los Angeles, California from out of state lead the migration. San Antonio made the top seven out of the top 10 destination cities where people are moving around and reorganizing their lives this past year in Q3.
That is nearly 100% net increase in migration looking at the third quarter of 2020, we had about 3,000 net people move in then quarter three in 2021, we had 5,000 net. What exactly will happen in 2022 no one can tell but all signs point to additional price increases and additional home value appreciation.
What’s Next
But one thing is for sure much of city leadership seems to want to go ahead and continue building for the future. The San Antonio Express News broke a story that airport expansion is something that’s on the table as part of the master plan.
They want to bring in more international flights and make betting around the country easier for businesses looking to relocate to other cities. With more flights to choose from more businesses are likely to relocate here rather than opt for other cities. This of course leads to more home buyer demand and you guessed it, more price appreciation for years to come.
Bottom Line
If you’re thinking about making a move in the next year plan for some higher prices coupled with a slightly higher interest rate for buyers. And if you’re selling you may have some additional competition on the way but the over all advantage is still on your side.
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