Back in 2020, we had a total of 16,000 transactions over the entire year. In 2021, that number increased to 17,000. Will we break that threshold this year? Today I’ll break down what we learned from the 2021 market and what we expect from the market this year.
The first numbers I looked at were the number of foreclosure listings we had. In 2020, records show there were 253 foreclosure sales, and in 2021, there were only 99. That number might tick up a little bit this year because banks are filing for foreclosures, but I don’t think the number will get very big. Foreclosures will more likely reflect what we saw in 2020, or perhaps a little higher.
In terms of active resale listings, we had 1,040 in 2020, whereas today we have a little under 700 active listings. There were 1,121 new construction listings compared to today’s 1,078. I think that disparity is due to the fact that we’re getting some homes under contract, but we’re also facing a supply shortage. That has caused prices to go up, and that, in turn, has kept builders from adding to their inventories.
“The shortage of homes and volatile lumber prices are driving new construction prices up.”
For total active listings in multi-family properties, we only have 19 currently active in the market, while in 2021, we had 31. In terms of total sales, we sold 184 in 2020 and 266 in 2021 according to the Des Moines MLS. I think we’ll see a pretty robust multi-family market this year because prices are going up, and investors will want to take advantage of appreciating values.
Now that we’re already around six weeks into 2022, we’re seeing a pretty active market. The shortage of homes and volatile lumber prices are driving new construction prices up. In fact, we recently helped a client close on a new construction home; we put in our offer in December, and they’re telling us that my buyer already has instant equity. On top of home appreciation, the 20% to 30% rise in lumber supplies means that this was an excellent investment.
Returning to my initial question about whether we would break the 17,000 threshold for transactions: I don’t personally think that we’ll see quite that many transactions this year. Interest rates are set to climb this year—some residential rates have been quoted as high as 3.875%. The Federal Reserve is raising short-term interest rates in order to help cool off the inflation we’re seeing in the residential market.
If you have any questions about the numbers discussed today or anything else to do with real estate, don’t hesitate to give us a call or send an email.