Welcome to the February 2022 edition of Suburban Real Estate News.
The housing market is on fire. In fact, it hasn't been this strong since the pre-Global Financial Crisis period. Inventory levels are at all-time lows and buyer demand is accelerating. Rising interest rates are creating buyer panic and fueling bidding wars. We have seen bidding wars on excess of 20% over ask with no financing contingencies to win bids. Buyers are not waiting for the weekend to see homes anymore, they visit on the listing date. They make sizable offers immediately in an effort to prevent a bidding war. Buyers are getting creative with their bids.
There are two ways to value an asset: top-down and bottom-up. A top-down approach is based on the market, it looks to the peer-group and local comparisons to assign a value based on recent transactions. By contrast, a bottom-up approach is based on the value of material costs, labor costs and other expenses. In the current market, we are seeing all of the factors escalated. Buyers want to buy now, there is a scarcity of homes to buy and the cost to build has escalated so there is a lack of new building. The value buyers are assigning to a house has less to do with local comps and more to do with the question, "
What does this home mean to me"?
One Token Over The Line: Are NFTs The Future Of Buying And Selling Real Estate?
“I see a world very soon in which 50% of all real estate transactions are done with crypto, and where contracts are recorded on the blockchain and ‘signed’ as NFTs,” Million Dollar Listing New York star Ryan Serhant told Elite Agent this week.
Greenwich CT broke records in 2021!
There were 1,005 single-family closings in 2021 compared to 863 in 2020, an increase of 16% with the dollar volume up 31% to more than $3 Billion (the highest ever), an increase of more than $700 million year over year! The average price of a home was $2,995,027 (the highest ever), up from $2,667,709 in 2020.
Investors still see the value of Real Estate
Investors accounted for 18.2% of home purchases across the US in the 3rd quarter. The figure was a jump from a 16.1% share in the second quarter and 11.2% share in 2020’s 3rd quarter.
151 office buildings, hotels or other commercial properties were converted to apartments in the U.S. in 2021.
Companies are going to Miami
According to LinkedIn’s analysis, new company formation in the Miami area surged 45% during the pandemic. Miami now ranks second nationwide for new company formation. All three of the top cities are in Florida, with Orlando barely nudging out Miami for the top spot by 1%.
Austin, Phoenix, Raleigh, Tampa, Jacksonville, Salt Lake City, Atlanta , Nashville, Charlotte, Las Vegas, Riverside CA, Dallas/Fort Worth, Tucson home values appreciated over 25% in 2021, often fueled by people moving from out of state accustomed to much higher pricing.
