Welcome back to The Update, a monthly newsletter discussing real estate related topics, and fun things happening in the community! It’s December, which usually means we should be ankle deep in snow…But since we’re not, i’ll enjoy not having to snowblow the driveway yet! This edition is jam-packed with information, so let’s get started!
Market update
Starting off, we have our monthly update on the market. Take a look to check out the stats for single family homes for Kenosha, Racine, and Milwaukee Counties!
So, what does it mean? Let’s talk about that!
Overall in comparison from November numbers have gone down across the board; but that’ pretty normal. With holidays and (usually) bad weather, sellers are more likely to wait to put their home on the market till spring. Less sellers want to sell, less homes go under contract, less homes close.
However, I don’t think this will slow down buyer demand. With some of the youngest millennials now able to buy a home and increasing rent prices in both urban and suburban areas, I don’t foresee demand to purchase decreasing. But I don’t think we’ll see the same insane bidding we saw this past year. With slow-rising rates for loans, (though not astronomical, but not insanely low like 2020) people won’t be able to qualify for as much as they could almost 2 years ago, and buyers may have to be more strategic about what they’re looking for.
For buyers, if you were thinking about buying a home, now is the time! December is a double edged sword; there’s less homes on the market, but also less competition. If you’re serious about moving, this might be what you were waiting for! With (slow rising) rates, if you’re serious now is the time to get that home for a low interest rate!
For sellers, patience is key. We’re at the end of the year, and the buyer pool isn’t as large. However, the buyers that do come through are more likely to be more serious than what was seen over the summer. Your amount of showings may decrease compared to then, but your pool of buyers who mean it may increase.
the 2021 Recap
Well, 2021 was quite the year in real estate to say the least. From those fearful of another market crash, to buyers writing tens of thousands over asking and dropping contingencies left and write to still only be one of multiple offers, this year was a headline maker for sure! So, what stood out in 2021 this year? For starters..
The median price skyrocketed! According to the WRA (Wisconsin Realtors’ Association) the median price did nothing but rise with it peaking in June at $269,000.00!
We also saw strong sales this year, similar to last year. Even though there were slightly more sales in 2020, it’s easy to see that the market was white hot due to the overall median price!
source: wra.org
source: wra.org
According to NAR (National Association of Realtors) annual Home Buyers & Sellers Generational Trends Report, the largest generation of sellers this year was Gen X, while the largest number of buyers this year was Elder Millennials. First Time Home Buyers made up 31% of total sales across the nation, reinforcing the ideas and number shown for the local Southeastern WI area in terms of sales and price.
The most commonly purchased single family home this year has been properties with:
3 bedrooms
2 bathrooms
Detached Garage
(about) 1,900 square feet
Some of the biggest things buyers considered this year when purchasing a home was:
Heating and Cooling costs
Commuting costs (Buyers aged 22-29)
The state of windows, doors, and siding on a home (Buyers aged 65-73)
And, as far as where are all these people nationwide moving to? The burbs’ are still in the lead!
Buyers across the board in all age ranges ranked higher in moving to a suburb, with moving to a small town as an overall close second.
And in finding those homes? Again, the first step taken by buyers across the board was to look at homes online, with the feature that was the most important being photos of the property and detailed information about the property available to view online.
As far as sellers go…
Typically sellers have lived in their home for an average of 10 years before selling, and one the biggest reason for selling (across the board for all ages) was to be closer to friends and family, only to be followed by the size of the home being too small, or change in the situation of the family (marriage, having kids, divorce, etc.,)
Over 50% of sellers used the same real estate agent to help them sell and buy their home, with 89% of sellers having their listing listed in MLS (multiple listing service.)
33% of sellers offered incentives to get their home sold (such as including a home warranty), and nationwide it was noted by sellers (whether they offered an incentive or not) that they median of $66,000 more than they bought it for; 2021 was the year to net profit on your home!
So, to recap:
2021 was a crazy year for sales!
While inventory in the state of SE WI was the same or slightly less than 2020, prices skyrocketed.
Nationwide, the most common type of home bought was a 3bed, 2bath home with about 1,900 square feet.
Heating and cooling costs along with how good of condition items like windows, doors, and siding were important to buyers, along with commuting costs.
Over 50% of sellers used the same agent to buy and sell a home
33% of sellers offered incentives to help get their home sold
and that sellers netted a median of $66,000 more than when they bought.
So, how will 2022 shape up? Sources like realtor.com note that suburbs will still be a hot place for people to move, and that the record highs seen in 2021 will still make it hard to purchase a home; rising rents seen nationwide don’t help either.
It’s likely we’ll see home prices stay at the same place they currently are, or rise slightly, but we may not see the frenzy that was seen in 2020 & 2021.
Sources like The Mortgage Reports note to keep an eye out for slow rising interest rates, which may help bring some relief to the market. Rising prices would mean buyers cant afford as much home, in turn only being able to offers on properties for certain amounts. In turn, listings once priced correctly would become overpriced and sellers would lower price which would somewhat normalize the market. However, changes like that are slow, and take time so we may not see affect to the market for a while. I would agree with expecting to see prices stay where they are, or rise.
While the following above could be the way to normalize the market, there’s still one thing in not accounted for: low inventory. Squeezes on supplies (like those used for building new construction) make it hard for builders to build, and in turn, sellers to sell.
Sellers looking to move to pre-existing homes and capitalize on their profits now need to take those profits to use as parts of their downpayment for (the now) more expensive homes they’re hoping to move into; so some sellers may just say that they’ll stay put until the market is more reasonable. So while interest rates could normalize the market a bit, I wouldn’t expect anything to happen fast.
To put it simply, 2021 was a wild ride for real estate, and it looks like 2022 is going to be a great year for selling or buying a home. Want help with that? Feel free to reach out on the “contact” page and we can get in touch!
FEATURED LISTING: 2900 Geneva St.
Feel free to check out some of the images and information below, or to learn more about this gorgeous listing, click here.
2900 Geneva St Racine, WI 53402
Presented at: $149,900
Est. Year Built: 1944
Bedrooms: 2
Bathrooms: 1
Garage Spaces: 1.5
Attached/Detached: Detached
Est. Square Footage: 848sqft
Taxes (as of 2020): $2,748.27
Description: Simply stunning north side Ranch. Inviting and warm, meticulous and exacting, this absolutely gorgeous home waits only for you. Live the good life! From the impressive natural hardwood floors, to the dazzling Kitchen, easy layout, and jaw dropping main bath, everything has been done for you. You'll be the envy of friends and family members. High end, brand new appliances adorn the sensational Kitchen, fine finishing touches such as the precise fresh paint and crown molding round out this beauty. Enjoy the fenced in back yard; cookout on the deck? The full basement sports plenty of room for your treasures, or your finishing ideas. Come see, I guarantee you'll be impressed.
And that wraps up our December Edition of The Update! We covered a lot of information, but it’s good to look back on the year that happened so we can get excited about 2022! Until next month!