2021 was a wild ride for real estate, driven by fundamental demand from home buyers and sellers. With the year that the industry has experienced, we are well-positioned to continue this momentum in the year ahead. Let’s examine some key takeaways from our latest survey, which aimed to gauge what’s on home buyers’ and sellers’ minds and look ahead to 2022.
Homeownership trumps dream destinations, big weddings, and student debt
The pandemic not only changed the way we work but also shifted priorities. This has been a year of taking stock of what ‘home’ means, especially relative to family and work. With greater flexibility regarding the necessity of commuting, many people sought to move closer to family, explore more affordable destinations that allow them to purchase a home that works better for them, or accelerate future family plans by several years.
With this in mind, Coldwell Banker sought to reveal consumers’ attitudes towards home buying given an unprecedented housing market in our recent consumer survey. We found:
- After more than a year indoors, owning a dream home outshined that next bucket list destination, with approximately 77% of Americans reporting that they’d rather invest their money in homeownership instead of spending on a vacation.
- 82% of unmarried Americans surveyed, including 85% of females. would rather invest in a home than pay for a big expensive wedding.
- Similarly, 41% of college graduates are likely to select “owning a home” as a more important financial goal than “paying off student debt” (17%).
As homeownership dreams eclipse other life goals or priorities, we will continue to act as trusted advisors helping them to navigate through this unprecedented market.
New homebuyers entering the market
The survey also found that Hispanic homeownership desire is high, with 42% of Americans who self-identified as Hispanic saying “owning a home” is their most important financial goal.
Additionally, 45% of Gen Zers and Millennials between the ages of 18-44 say that owning a home is an important financial goal to them compared to only 30% of Americans over the age of 55.
Findings also suggest that 57% of young homeowners (age 18-34) have felt that their housing needs have been impacted by a growing household in October 2021, when compared to February 2021 (50%). With this age group entering an era where they are kicking off their careers, getting married, and starting families, they are soon to enter the housing market with a need for more spacious long-term living arrangements.
Luxury homes
October NAR data showed that the median existing-home sales price increased 13.1% year-over-year to $353,900. And when we look at $1 million+ homes, sales are up 30.6% from one year ago. Who exactly is buying these homes?
Our newest “A Look at Wealth” report found that nearly three times as many individuals with a $5 million+ net worth own $1–$5 million in real estate, compared to the numbers in 2019 — that’s a 180% increase in luxury property ownership. Newly created wealth has allowed affluent individuals to buy pricier homes — and more of them. People also continue to make life-changing moves, choosing to live out their values or embrace a “live out your dream” mindset following the pandemic.
How agents and brokers can ride the high into 2022
The wild ride of this year’s real estate market began the moment the fireworks extinguished on New Year’s Day 2021. We saw that momentum carries throughout the year and, as we head towards the new year, there are two interesting factors that will carry into 2022 that bode well for the industry overall and for our communities.
The industry is welcoming back international investors with open arms. Despite the uncertainties and disruptions of Covid-19, global savings rates are at or near all-time highs. As funds worldwide seek safe, stable, and valuable investment opportunities, U.S. real estate is among the largest and most attractive asset classes. Today, global funds are flooding into private mortgage-backed securities, adding to Fed buying as part of its quantitative easing program, bidding up prices for these assets, and keeping yields – therefore interest rates – near all-time lows, even after recent increases.
We have kept a close pulse on the hearts and minds of buyers and sellers throughout the year which enabled our agents to create highly targeted marketing and client support at their local operating levels. These insights helped us to elevate our marketing suite, technology offerings, and luxury programs giving our agents a large competitive edge which we will continue in 2022.
Upgrade now to Coldwell Banker and let’s make 2022 our strongest year yet.