Realtors express ‘caution but optimism’ about the housing market

December 2021 Monthly Housing Market Trends Report

  • The national inventory of active listings declined by 26.8% over last year, while the total inventory of unsold homes, including pending listings, declined by 16.1%. The inventory of active listings is down 57.1% compared to 2019.
  • Newly listed homes are down 6.1% nationally compared to a year ago, and down 7.6% for large metros over the past year. Sellers are still listing at rates 12.9% lower than typical 2017 to 2019 levels. 
  • The December national median listing price for active listings was $375,000, up 10.0% compared to last year and up 25.0% compared to 2019. In large metros, median listing prices grew by 5.4% compared to last year, on average. 
  • Nationally, the typical home spent 54 days on the market in December, down 11 days from the same time last year and down 26 days from 2019.®’s December housing data release reveals a relatively warmer month (by housing market standards at least) than this fall, as looming interest rate hikes prompt buyers to lock-in rates in what is normally a slower time of year. The growth rate in the national median listing price increased in December, as did the gap in time on market compared to last year, as homes spent 11 days less on the market. The decline in inventory continued to intensify and price reductions- which had been growing in share compared to last year for the past four months- ended December at the same level as last year, indicating less need to slash prices to sell homes.

The Number of Homes for Sale Continues to Shrink

Nationally, the inventory of homes actively for sale in December decreased by 26.8% over the past year, a larger rate of decline compared to the 26.0% drop in November. This marks the third month in a row where the rate of decline compared to last year has worsened. This amounted to 177,000 fewer homes actively for sale on a typical day in December compared to the previous year. The total number of unsold homes nationwide—a metric that includes active listings and listings in various stages of the selling process that are not yet sold—is down 16.1% percent from December 2020. This is a minor improvement from last month’s 16.2% decline as the inventory share of listings in pending status increased slightly, a sign that buyers are active even with fewer, fast-moving options to choose from.

Active Home Listing Count

In December, newly listed homes decreased by 6.1% on a year-over-year basis and sellers were still listing at rates 12.9% lower than typical of 2017 to 2019 December levels. This marks the fourth straight month of lower new seller activity than last year which has contributed to lower inventory.

Newly Listed Homes

The inventory of homes actively for sale in the 50 largest U.S. metros overall decreased by 26.6% over last year in December, an increase in the rate of decline compared to last month’s 24.2% decrease. Regionally, the inventory of homes in large western and southern metros are showing the largest year-over-year decline (-32.1% and -20.0%, respectively) followed by the Northeast (-24.8%) and Midwest (-16.0%). 

Markets which are seeing the largest year-over-year growth in newly listed homes include Memphis (+22.0%), Pittsburgh (+10.9%) and Philadelphia (+10.8%). Markets which are still seeing a decline in newly listed homes compared to last year include San Francisco (-27.6%),  Hartford (-26.6%), and Raleigh (-24.1%). 

Homes Sell 11 Days Faster Than Last Year

The typical home spent 54 days on the market this December, which is 11 days less than last year and 7 days more than last month as the housing market slowed for the holidays. Despite typical seasonal slowing, homes still sold more quickly than any other December in recent history and homes even sold more quickly than during summer seasonal peaks of pre-pandemic years.

In the 50 largest U.S. metros, the typical home spent 48 days on the market, and homes spent 7 days less on the market, on average, compared to last December. Among these 50 largest metros, the time a typical property spends on the market has decreased most in large metros in the South (-9 days), followed by the West (-6 days), Midwest (-5 days) and Northeast (-5 days). 

Among larger metropolitan areas, homes saw the greatest yearly decline in time spent on market in Miami (-31 days), Orlando (-19 days), and Raleigh(-18 days). Only Hartford homes saw time on market increase, by just five days. However, time on market in Hartford is shorter than typical levels seen this time of year in 2019 and earlier. 

Home Inventory Time on Market

Listing Price Growth Accelerates

The median national home price for active listings declined from $379,000 in November to a seasonal low of $375,000 in December. However, the median listing price grew by 10.0% year–over-year, an acceleration from the annual rate of 8.6% in November. This acceleration breaks the trend of 8 to 9 percent growth seen since August. Additionally, alternate price measures, which better account for a change in the mix of listings suggests that a larger number of smaller homes listed this year than last is dampening the rate of growth in the median listing price. The median listing price per square foot increased by 13.3% year-over-year in December. The median listing price for a typical 2,000 square-foot single family home rose 18.6% compared to last year. 

Median Home Listing Price

The share of homes having their price reduced had been on the rise from August to November. In December, growth in the share of homes which have had their price reduced decelerated to just 0.1 percentage points from a higher growth rate of 2.0 percentage points in September, potentially signaling a shift in the trend of rising price reductions in the new year. In any case, the share of price reductions remains lower than typical 2016 to 2018 levels and this indicates the market is not yet cooling. 

Home Listing Price Reduced Share

Active listing prices in the nation’s largest metros grew by an average of 5.4% compared to last year. Price growth in the nation’s largest metros has been lower than other areas across the country, but much of this can still be attributed to new inventory bringing relatively smaller homes to the market this year. The median listing price per square foot in the nation’s largest metros grew by 11.3% over the same period.

Las Vegas (+32.4%), Austin (+28.8%), and Tampa (+25.4%), posted the highest year-over-year median list price growth in December, while Austin also showed the greatest growth in the share of homes which had their price reduced compared to last year (+3.4 percentage points), followed by Pittsburgh (+3.2 percentage points) and Buffalo (+2.1 percentage points). 

December 2021 Regional Statistics (50 Largest Metro Combined Average)

RegionActive Listing Count YoYNew Listing Count YoYMedian Listing Price YoYMedian Listing Price Per SF YoYMedian Days on Market Y-YPrice Reduced Share Y-Y
Midwest-16.0%-4.2%-2.8%6.7%-5 days-0.8%
Northeast-24.8%-6.9%0.7%8.3%-5 days-0.2%
South-30.0%-6.8%10.1%15.8%-9 days-0.9%
West-32.1%-13.1%8.3%9.8%-6 days-0.5%

December 2021 Housing Overview by Top 50 Largest Metros 

MetroMedian Listing PriceMedian Listing Price YoYActive Listing Count YoYNew Listing Count YoYMedian Days on MarketMedian Days on Market Y-YPrice Reduced SharePrice Reduced Share Y-Y
Atlanta-Sandy Springs-Roswell, Ga.$390,0009.9%-20.3%0.3%43-1013.8%1.4%
Austin-Round Rock, Texas$544,00028.8%-10.4%1.6%42-1414.9%3.4%
Baltimore-Columbia-Towson, Md.$311,000-4.2%-12.5%-2.0%50-417.5%1.0%
Birmingham-Hoover, Ala.$272,0004.3%-31.3%-7.2%53-1012.8%-1.8%
Boston-Cambridge-Newton, Mass.-N.H.$695,0007.0%-32.3%-13.4%52-89.8%-2.0%

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From the Fed’s latest Beige Book report, with our bold emphasis added:

Realtors in the First District express caution but optimism about the mixed sales results that continued in the region in February. Year-over-year sales of single family homes decreased in Rhode Island, Massachusetts, and Connecticut, and increased in Maine and Vermont. (Contacts in New Hampshire were unavailable for comment in this round.) In the condominium market, sales increased relative to last year in Connecticut, Massachusetts, and Vermont, while decreasing in Rhode Island; condo sales information is not reported in Maine. The consensus across the First District is that the decline in sales will be short lived; respondents say it was partially driven by the tough winter, as well as uncertainty about new federal flood insurance rules. Signs of spring weather and new legislation limiting flood insurance premium increases are lessening these concerns. In Massachusetts, however, inventory shortages are said to be the key reason for the decline in sales. One Massachusetts contact stated “there is just not enough supply to meet demand.” As a result, Massachusetts contacts say multiple bids are common and the median sales price for single family homes has increased compared to the year-earlier median in 17 consecutive months. Median sales prices also increased year-over-year in Connecticut and Maine, but declined in Vermont and Rhode Island. Residential real estate contacts say they expect sales to pick up seasonally this spring, but foresee no significant market shifts.

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Boston real estate blog updated 2021