Fourth Quarter 2021 Market Report Report Written By: Elliot F. Eisenberg, Ph.D. Source: Stellar MLS
Economic Overview Nationally By: Elliot F. Eisenberg, Ph.D.
While 21Q3 GDP growth of 2.3% was a bit of a disappointment, preliminary estimates for 21Q4 growth look to be in the range of 5-6% despite the arrival of the Omicron variant of Covid-19 late in the quarter. Regrettably, Omicron is likely to do some meaningful damage to 22Q1, and instead of having growth somewhere in the ballpark of 5%, it is more likely to be in the range of 2-2.5%. It is important to note that these waves of Covid seem to generally push demand forward rather than reducing it permanently, and as such, I expect overall GDP growth in 2022 to be somewhere in the vicinity of 4%, which while down from what will likely wind up to be 5.5% for 2021, is still a great number. Looking even further into the future, 2023 should be a bit slower and end up somewhere around 2.5%, which is back to ‘normal’ as we slowly revert to trend growth. While it was a bit volatile, overall job growth was quite good in 2021 and should continue to do well into 2022, such that by the end of 2022, we will have recovered the remaining 3.4 million jobs that were lost during the pandemic and will be back to pre-Covid levels of employment. That would translate into roughly 285,000 new jobs per month in 2022, nearly double the pre-Covid number. Still, that leaves the United States millions of jobs shy of where we would have been in the absence of Covid. In other words, by the end of 2022, we will still be short 3-3.5 million jobs that we would have seen created in an economy without Covid. As for inflation, it is largely being driven by a combination of supply chain problems, an inability of suppliers to produce goods (due to input shortages and lack of available labor) and simultaneously, unusually strong consumer demand, which is driven, at least in part, by forced savings and government payments. These inflationary effects are likely to peak in 22Q1 and should generally decline throughout the year, with inflation ending 2022 at 4%.
...all expectations are that 2022 will be yet another strong seller’s market, despite higher interest rates.
The Federal Reserve adjusted their approach to monetary policy in November as inflation concerns heightened, and they reduced their monthly purchases of Treasuries and mortgage-backed securities such that they will no longer be making any purchases by the end of March 2022. Initially, they had signaled that they would take a slightly longer time to taper. This new approach leaves them free to further address inflation by raising interest rates as early as March of 2022. I expect them to raise rates at least twice, probably three times, and possibly as many as four times in 2022, with increases of a quarter-point each time, such that by the end of 2022, long-term rates and the 30-year mortgage rate in particular will increase by 0.5% to around 3.7%. As far as fiscal policy is concerned, it became contractionary in the second half of 2021 and is likely to remain quite contractionary through 2022, despite the passage of the infrastructure bill. In terms of the fate of the Biden administration’s “Build Back Better” or social infrastructure bill, prospects look increasingly weak, but it’s too early to write its obituary. It may be that in the end, parts of the bill make it through the legislative process, but unless that happens by mid-year, I see little likelihood that we will see much movement on it. In terms of the national housing market, it continues to go from strength to strength. While there were some hopes that available inventories would rise, that has so far not materialized, and year-over-year levels continue to decline. As we enter 2022 with inventories at record seasonal lows, elevated household formation, and good job growth, all expectations are that 2022 will be yet another strong seller’s market, despite higher interest rates. Regarding prices, it appears that at the national level, price appreciation peaked several months ago and going forward we should see price gains weaken from the upper teens to the lower teens or upper single digits. Importantly, there are no indications that we are seeing anything like what we saw in 2005/2006 in the buildup to the housing bust of 2007/2008. Dodd-Frank has done much to guarantee that home buyers are truly qualified, what was then a housing glut is now a housing shortage, and interest rates, even as they rise in 2022, will remain at historical lows. This remains a strong housing market.
Economic Overview Florida In Florida, the statewide unemployment rate was 4.5% as of November 2021, above the national average of 3.9% but down substantially from the peak of 14.7% in April of 2020; pre-Covid it was 3.3%. In Hillsborough County, the November 2021 unemployment rate was 3.4%, while in Pinellas County it was 3.3%. Inflation-adjusted real GDP for the state in 21Q3 crossed the trillion-dollar mark for the first time in history, and at an estimated $1 trillion, was meaningfully higher than the pre-covid peak of $978.7 billion in 19Q4. Florida is only the fourth state to have GDP exceeding $1 trillion, with only California, Texas, and New York higher. Across the state of Florida, the median sale price of single-family homes through the month of November (the latest data available) rose to $364,900; a 19.6% gain over last year, while the townhome/condo median sale price rose by 19.9% to $273,270. Compared to last year, closed sales of single-family homes through November were up 14.5% while condominium and townhome sales were up 38.3%. Overall sales volume of single-family homes through November is up 45.3% compared to 2020 and dollar volume of townhomes and condos is up a staggering 75.7% compared to 2020. Inventories remain very tight. With around 34,000 single-family and 20,000 multi-family active listings statewide at the end of November, there is just a 1.2 month’s supply of single-family homes, down about 40% from last November’s levels, and a 1.5 month’s supply of townhomes and condos, down by about two-thirds from last year. Florida’s price appreciation is objectively high and is no doubt strongly influenced by staggeringly low levels of inventory, which are about half of the national average. In Hillsborough and Pinellas counties (combined data), December median prices continue to show significant gains over last year, with single-family homes increasing 24% to $375,000; an all-time high, and townhomes and condos up 25% to $248,000, also a record. Average prices were up as well, with single-family homes at $472,862; up 20.0% over last year, and townhomes and condominiums at $327,966; up 16%, a record high as well. Closed sales of single-family homes during the fourth quarter compared to 2020 were down by 6% while sales of townhomes and condos were nearly flat. New listings of single-family homes compared to 20Q4 were down 10%, while new listings of townhomes and condos were up just slightly. Month’s supply of inventory of single-family homes is just 0.6, while for townhomes and condos it is just 0.7, down 30% and 42%, respectively, compared to last year Florida’s real estate market continues to outpace many other areas of the country, undoubtedly due at least in part from in-migration from high-tax states. Further, data from jobsites like Indeed and Glass Door show a massive increase in the number of jobs that allow for a flexible work environment or work-from-home. In fact, the number of jobs that allow these types of arrangements has increased tenfold, from one in sixty jobs to one in six jobs, cementing the fact that work-from-home is a reasonable expectation for a non-trivial portion of the whitecollar population. This suggests that all else equal, the Tampa housing market has and should continue to benefit both from the work-fromhome phenomena and movement from more expensive high tech and financial centers. Further, there are no signs of immediate relief of tight inventories, and as we move into the spring selling season, buyers should be prepared to move quickly if they find a property they want. About the Author: Elliot Eisenberg, Ph.D. is the Chief Economist of GraphsandLaughs, LLC, a Miami-based firm specializing in national and international macroeconomic consulting and speaking. Dr. Eisenberg earned his Ph.D. from Syracuse University and was formerly a senior economist with the National Association of Home Builders. He is a regularly featured guest on cable news programs, talk and public radio, and authors a daily 70-word commentary on the economy that is available at www.econ70.com.
Hillsborough County Single-Family Homes Both median and average prices for single family homes in Hillsborough County for the fourth quarter (Q4) of 2021 rose to all-time highs. The median price of $369,935 was up 25% compared to 2020 and the average sale price of $446,989 gained 22% over last year. Fourth quarter sales volume of just more than $2.4 billion was up 13% over last year.
Median and average prices for single family homes in Hillsborough County for Q4 of 2021 rose to all-time highs.
Closed sales of 5,402 during Q4 were down 7% from 2020, while new listings of 4,922 were down 8% compared to last year. There were 1,055 single-family homes available for sale at the end December, representing just 0.6 month’s supply of inventory compared to 0.8 month’s supply at the end of 2020 and at the end of 21Q3. The most expensive single-family home sold in Hillsborough County during the fourth quarter of 2021 was for $11.5 million. Compared to the same period last year, days on market declined 41% to 17 days. It bumped up just slightly from 14 days on market in 21Q3. Percent of sold price to original listing price rose to 100%, an increase over last December’s 99%.
Median Sold Price
Aver age Sold Price
$369,935
400
400
Thousands
Thousands
$295,000
250 200 150 100
300 250 200 150 100 50
50 0
$367,116
350
350 300
$446,989
450
450
2020
2021
2020
2021
Fourth Quarter
25%
0
2020
2021
2020
2021
Fourth Quarter
22%
Closed Sales 6000
5,827
5,402 5,663
5000
2.5
Billions
3000 2000 1000 2020 2020
Dollar Volume $2,414,637,014 $2,139,183,054
2.0
4000
0
3.0
1.5 1.0 0.5 0.0
2021 2021
2020 2020
2021 2021
Fourth Quarter
Fourth Quarter
13%
7%
Percent Sold Price to Original List Price
100%
99%
100%
100%
1% Fourth Quarter
2020
2021
New Listings
5,552 5,353
6,558 4,922
Aver age Days on Market
29
17
2020
2021
2021 2020
2021
Fourth Quarter
8%
Fourth Quarter
41%
5012 S The Riviera Street Tampa, Florida
4 BEDROOMS | 5 BATHS | 4,294 SQ FT
6211 Bayshore Boulevard
Tampa, Florida
4 BEDROOMS | 2 BATHS | 2 .050 SQ FT
Hillsborough County Condos and Townhomes The median price for townhome and condos in Hillsborough County rose 28% to $241,000; an all-time high and the highest level of price appreciation across the region. The average price of $284,443 was also at an all-time high and rose 18% over last year. Sales volume increased 16% compared to 20Q4 to $465 million. The number of townhome and condos sold this quarter was down just slightly compared to last year at 1,635. New listings declined by 4% to 1,448. There were just 222 active listings on the market at the end of the year, which represents less than two weeks’ worth of inventory, about half of last year’s levels. In the condo/townhome market, the most expensive home sold during Q4 in Hillsborough County sold for $3.45 million. Compared to last year, days on market for condos/townhomes fell to 14 days, down from 35 days in 20Q4 but up from 12 days in 21Q3. Units generally sold for full listing price, up from 98% of original list price at this point last year, but down slightly from 101% last quarter.
Median Sold Price
200
300
$241,000 $189,000
150 100 50 0
Aver age Sold Price
Thousands
Thousands
300
2020 2020
2021 2021
Fourth QUARTER
28%
The median price for townhome and condos in Hillsborough County rose 28% to $241,000; an all-time high...
$242,066
$284,443
200 150 100 50 0
2020 2020
2021 2021
Fourth Quarter
18%
Dollar Volume
Closed Sales 600
4000
3000 2000
1,635
1,660
1000
Millions
500 400
$401,829,705
$465,064,836
300 200 100
0
2020 2020
2021 2021
0.0
2020 2020
2021 2021
Fourth Quarter
Fourth Quarter
2%
16%
Percent Sold Price to Original List Price 98% 99%
100% 101%
100% 100%
100% 100%
2020
1,503
Fourth Quarter
2021
New Listings 5,552
2%
6,558
1,448
Aver age Days on Market
35
14
2020
2021
2021 2020
2021
Fourth Quarter
4%
Fourth Quarter
60%
450 Knights Run Avenue #1202 Tampa, Florida
3 BEDROOMS | 4 BATHS | 2 ,034 SQ FT
120 Brightwater Drive #2 Clearwater Beach, Florida
4 BEDROOMS | 5 BATHS | 3,340 SQ FT
Pinellas County Single-Family Homes In Pinellas County, the median sale price of a single-family home was at an all-time high of $383,000 and up 19% over last year. The average price was up by 16% to $513,764; easily an all-time high. Sales volume of single-family homes in Pinellas County during 21Q4 totaled just below $1.8 billion, a 12% increase over last year.
The most expensive single-family home sold in Pinellas County during fourth quarter sold for $8.2 million.
Closed sales during the quarter declined 4% compared to last year, to 3,417 while new listings were down a meaningful 13% to 3,087; the lowest level of the past two years. There were just 652 single-family properties on the market the end of the quarter, a scant half-month’s supply of inventory. The most expensive single-family home sold in Pinellas County during the fourth quarter sold for $8.2 million. Days on market for single-family homes in Pinellas County was 20 days during the quarter (compared to 29 days last year but up from 16 days last quarter), while percent of sold price to original list price of 99% was up from 98% and the same as the last two quarters.
Median Sold Price $383,000
400
500
$321,950
300 250 200 150 100 50 0
600
Thousands
Thousands
350
Aver age Sold Price
2020 2020
2021 2021
Fourth Quarter
19%
$513,764 $441,232
400 300 200 100 0
2020
2021
2020
2021
Fourth Quarter
16%
Dollar Volume
Closed Sales 3.0
3500
3,560
3000 2500 2000 1500 1000 500 0
2.5
3,417
Billions
4000
2.0
$1,755,532,267 $1,570,787,226
1.5 1.0 0.5
2020
2021
2020
2021
Fourth Quarter
0.0
2020
2021
2020
2021
Fourth Quarter
4%
12%
Percent Sold Price to Original List Price 98%
99%
2020
2021
Fourth Quarter
New Listings
5,552 3,535
1%
6,558 3,087
Aver age Days on Market
29
20
2020
2021
2021 2020
2021
Fourth Quarter
13%
Fourth Quarter
31%
16550 Gulf Boulevard #746 North Redington Beach, Florida 3 BEDROOMS | 3 BATHS | 1,710 SQ FT
740 126th Avenue
Treasure Island, Florida 3 BEDROOMS | 3 BATHS | 3,044 SQ FT
Pinellas County Condos and Townhomes Condo and townhome prices in Pinellas County of $255,000 gained 17% above prices last year and were at an alltime high. The average price of $358,545 was 15% more than last year and, also at a record high. Dollar volume of townhome and condo sales during Q4 was 19% more than last year at $834 million, the second highest quarter of the last two years, surpassed only by 21Q2, the busiest selling period of the year. The number of closed sales compared to last year was up just slightly to 2,327; while new listings gained 4% to 2,381. Active inventories of 570 units are about a one month’s supply of inventory, the highest month’s supply of inventory across the market, but remain 53% below last year’s levels. In the condo/townhome market in Pinellas County, the most expensive property sold for $5 million.
In the condo and townhomes market in Pinellas County, the most expensive property sold for $5 million.
Days on market for condos and townhomes in Pinellas County fell to 19 from 22 days in 21Q3 and from 49 days last year. The percent of sold price to original listing price ratio increased from 97% in 20Q4 to 99%, the same level as all of 2021.
Median Sold Price
Aver age Sold Price 400
200
$218,000
150 100 50 0
300
$255,000
Thousands
Thousands
300
2020 2020
2021 2021
Fourth Quarter
17%
$358,545 $311,775
200 150 100 50 0
2020 2020
2021 2021
Fourth Quarter
15%
Closed Sales
900 800 700
3000
Millions
2000 1500 1000 500 0
2020
2021
2020
2021
$834,334,958 $702,740,998
600
2,327
2,254
Dollar Volume
500 400 300 200 100 0.0
2020
2021
2020
2021
Fourth Quarter
Fourth Quarter
3%
19%
Percent Sold Price to Original List Price 97%
99%
2020
2021
New Listings
5,552 2,280
6,558 2,381
2% Fourth Quarter
Aver age Days on Market
49
19
2020
2021
2021 2020
2021
Third Quarter
4%
Third Quarter
61%
2336 Kings Point Drive Largo, Florida
5 BEDROOMS | 4 BATHS | 4,055 SQ FT
1218 Beach Trail
Indian Rocks Beach, Florida 5 BEDROOMS | 6 BATHS | 4, 509 SQ FT
804 Eldorado Avenue Clearwater Beach, Florida 3 BEDROOMS | 3 BATHS | 3,608 SQ FT