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Home Prices Continue on a Tear – But for How Long?

Category: Retirement Real Estate

August 13, 2021 — The median sales price of single-family existing homes rose in 99% of metro areas in the second quarter of 2021 compared to one year ago. And those increases were not small – there were double-digit price gains in 94% of markets measured by the NAR. Continued low levels of housing inventory, combined with record-low mortgage rates, have caused an increase in median sales prices for existing single-family homes in all but one of 183 measured markets during the second quarter of 2021. That is according to the National Association of Realtors®’ latest quarterly report.

The median sales price of single-family existing homes rose 22.9% to $357,900, an increase of $66,800 from one year ago. All regions saw double-digit year-over-year price growth, which was led by the Northeast (21.8%), followed by the South (21.0%), West (20.9%), and Midwest (17.1%). Three of the hottest markets in the country showed price gains of more than 40% year over year: Austin (TX), Boise (ID), and Naples/Marco (FL).

“Home price gains and the accompanying housing wealth accumulation have been spectacular over the past year, but are unlikely to be repeated in 2022,” said Lawrence Yun, NAR chief economist.

“There are signs of more supply reaching the market and some tapering of demand,” he continued. “The housing market looks to move from ‘super-hot’ to ‘warm’ with markedly slower price gains.”

What this means for retirees

The report highlights what just about every person in America knows – the real estate market is hot. It is a great time to sell and a terrible moment to buy. If you are a retiree looking to step away from a home that is too large, not easily adaptable to retirement living, or in an area you don’t want to live in anymore – this is a great time to unload that home and take away your equity. Compared to even two years ago, this could be a big opportunity. But finding your next place to live might take patience and some creativity. You will probably have to pay more for a smaller home, condo, or rental. But particularly if you are downsizing or selling a home that was not easy to sell in the past, you will be ahead. If Mr. Yun’s prediction holds true, the explosive price gains of the last few years might slowly turn into a real estate market where you can find a more desirable retirement home without having to offer more than the asking price. You just might have to wait it out, time you can use to figure out where you truly want to live.

Comments? Did you sell your home recently, or are you thinking about it? Do you know what your next move is after that? Please share your thoughts in the Comments section below.

Posted by Admin on August 13th, 2021

14 Comments »

  1. We “rightsized” in May of this year. We elected to build a new house in the neighboring county and it was completed just after we sold our large house. I don’t regret it at all. I tired of maintaining all the landscaping, the large lawn, the pool and the 3 HVAC systems. I think we sold near the peak and the July RE sales figures show that the DFw market is slowing down. Maybe the RE hysteria is coming to an end. It can’t continue to escalate like it has for very much longer.

    by LS — August 14, 2021

  2. We are debating selling our home in Vancouver WA. Its doubled in 5 yrs and homes in my neighborhood sell in 1 day and 50k or more over asking. But my husband doesn’t retire for a yr. So hoping to still see the a nice profit in a yr.
    Its tempting to sell and live in our RV until then. We bought a house in Pahrump Nevada. Ovation at Mountain Falls. But it has to be rented for a yr as its a 1031 sale.
    So who knows

    by Tomi — August 14, 2021

  3. Tomi, it would seem the best thing would be to sell now, especially since you already have another home. Living in your RV for a year would be doable. I live north of you in Olympia and have been thinking of selling my, bigger than I want, house but can’t find something suitable, in my price range. Like someone else said, these prices are not going to stay, and I think once they start going down, it will be a rapid descent. The only thing propping up sales is the low interest rate; once that starts going up, sales will wane and so will the value of your home. My realtor said they expect to see a slow down starting in September/October time frame.

    by Sharon L Alexander — August 15, 2021

  4. Sharon I agree about selling. But one plus we have living in Washington is prices will always be great unless we have a recession. Everyone still wants to move to Oregon&Washington.
    We would have stayed here but we want sun! And nothing is affordable here. Will spend our summers in the PNW.
    Our last 2 homes we sold with Savvy Lane and saved so much money. Will do it the same. Why pay a realtor when we know it will sell on its own.

    by Tomi — August 15, 2021

  5. I haven’t heard of Savvy Lane. Tell me about it.

    by Sharon L Alexander — August 16, 2021

  6. Savy Lane = DIY Real Estate — See this short-cut — https://www.savvylane.com/ —– Stay healthy

    by phun-phil — August 17, 2021

  7. Another press release from the NAHB just came out and it confirms the thoughts others on this Blog have expressed about a softer market ahead:
    “… according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today, builder sentiment in the market for newly built single-family homes fell five points to 75 in August. Buyer traffic has fallen to its lowest reading since July 2020 as some prospective buyers are experiencing sticker shock due to higher construction costs,” said NAHB Chairman Chuck Fowke, a custom home builder from Tampa, Fla. “Policymakers need to find long-term solutions to supply-chain issues.”

    by Admin — August 17, 2021

  8. A “softer market” doesn’t necessarily mean price drops. It more probably means that prices will not continue to rise at the amount and speed they have over the last 18+ months. As long as mortgage rates reman relatively low, demand is likely to continue, although not as strong as it has been. One of the big factors in home price rises has been lack of inventory. People are reluctant to put their homes on the market, even at a big gain, unless they have a reasonably priced alternative to go to. Snowbirds who may consider moving permanently to their winter homes are at an advantage here. They can sell their in-demand, and usually larger, summer home and go to their winter place, permanently or for a wait-and-see period. They will usually have a large equity amount from their summer home to bring with them.

    by Clyde — September 9, 2021

  9. We are listing our home next week. 4 houses sold in August and the sold price was way over asking
    So going to take advantage of this sellers market.
    We are using Rex and saving time and money

    by Tomi — September 9, 2021

  10. Tomi, what is Rex? Just wondering….

    by Cindy — September 10, 2021

  11. Any idea what this means for winter rentals in Florida ? We didn’t make plans due to the Covid craziness there but now see the Farmers Almanac is calling for a very cold winter and I worry about falling on the ice as much as I do about other health concerns (I am vaccinated ). I haven’t looked yet but wonder if rentals have skyrocketed in Florida along with housing costs.

    by Barbara — September 10, 2021

  12. Cindy, Rex is a full service real estate company. But commission is lower
    It gets listed Wed.

    by Tomi — September 10, 2021

  13. Regarding winter rentals in Florida, the situation is fluid. Covid has everything up in the air, particularly in FL where hospitals are filling up. If you go to VRBO or Airbnb you will find plenty of places to rent. How those prices compare to previous years is hard to say – probably higher given how much the underlying value of the properties in Florida has gone up so much. If you want to rent in Florida or elsewhere, do it soon while there is still some inventory.

    by John Brady — September 11, 2021

  14. Thank you John for the advice. We never used VRBO and found it easy to use. I looked at both Venice (that’s where I always hear great things about) and Stuart, Florida (where good friends have relocated). Two different coasts but found there were plenty of rentals and all different prices so I’m sure we need to be somewhat careful. I noticed quite a few homes were not actually in Venice or Stuart but a town or two away which is not what I wanted. But as of yesterday there were some choices. Thank you for encouraging us to get started on this.

    by barbara — September 13, 2021

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