2022 First Quarter 2022 Market Report
Report Written By: Elliot F. Eisenberg, Ph.D. Source: Stellar MLS
Economic Overview Nationally By: Elliot F. Eisenberg, Ph.D.
The story of 22Q1 is the Russian invasion of Ukraine.
A
Along with the horrific humanitarian situation, there are significant negative impacts on US and global growth and markets. Making things worse, inflation, already troublingly high, has increased due to the Russian aggression for several reasons. First, energy prices rose dramatically, because Russia is a large producer of oil, natural gas and coal; in fact, it is one of the top three global exporters of all three fossil fuels. There is a direct supply impact from the war itself, and additional effects from supply line disruptions and sanctions. This translates into uncertainty around availability and rising futures prices, which feeds immediately into inflation. Secondly, Russia and Ukraine are large exporters of cereals and industrial metals, which causes prices on those commodities to rise, and along with sanctions, has impacted supply chains. The one-two punch of Omicron in the first part of the quarter and the Russian invasion of Ukraine in February/March has meaningfully damaged GDP growth in the just concluded first quarter of 2022, and we’ll be lucky to see a 1% gain, well down from what was expected. In response to the inflationary pressures on the economy, the Fed is likely to raise rates at all six remaining interest rate-setting meetings this year. Further, the FOMC is strongly hinting at several rate hikes of 50 basis points/half a percentage point instead of the usual 25 basis points/quarter point bumps to get ahead of the inflationary curve. Moreover, the Fed has recently signaled an intent to reduce the size of their balance sheet more rapidly in another effort to dampen inflation. These contractionary policies are largely baked into the cake, so to speak, and are thus not likely to push mortgage rates much higher than they already are. One area to monitor closely is the yield curve, which is becoming of concern to financial markets as it flirts with a mild inversion; where, for example, the yield on the two-year Treasury is above the ten-year Treasury. The reason for concern is that the last six or seven times this happened, it signaled a recession is imminent. That said, which pairs of Treasuries should be compared is hotly debated, and the timing of when the recession arrives after the inversion occurs ranges from seven to 33 months; and this time, of course, could conceivably be different. Still, because the Fed needs to raise rates so much to throttle back inflation, the risk of a recession is increased, and rate-raising cycles generally end in recession. This particular rate-raising cycle will be big; and therefore, the risk is higher. Further, sometimes simply the fear of the Fed raising rates too much or too quickly may be enough to cause a recession. In the housing market, inventory will stay scarce. Prior to the Covid-19 pandemic, housing inventory had already been shrinking for well over a decade, from a peak of slightly more than 4.0 million units at the end of July 2007 to just 1.5 million at the end of February 2020. Then Covid-19 came and pushed inventory much lower, to just 860,000 units. While inventory is now rising, as is typical in the spring, year-over-year changes in inventory remain negative, and it will continue to be a sellers’ market. While price appreciation in 2021 was torrid, with national prices rising close to 20%, price appreciation will slow in 2022 for three key reasons. First, with mortgage rates higher, some buyers will inevitably get priced out, reducing demand. Second, builders are likely to complete somewhat more houses in 2022 than in 2021, and in the process boost supply somewhat. Lastly, for much of 2021 inflation was lower, so inflation-adjusted price appreciation was just below nominal price appreciation. However, with inflation already running hot at over 8% in the early months of 2022, even if prices rise by 15% in 2022, real price appreciation will be much reduced. Finally, as they have for several years now, first-time buyers will continue to struggle in the current housing market. This is partly because of rising prices and interest rates, but also because Boomers are staying in their homes longer as they increasingly prefer to age-in-place, and because they are living longer than earlier generations. In addition, builders are no longer constructing as many entry-level homes as the cost of land, materials and labor conspire to make it all but impossible. Add to that the large savings hoard that was accumulated during the worst of Covid-19, the fact that foreigners are once again travelling to the US and looking to buy, that Wall Street is also buying new and existing single-family homes to rent, and the percentage of cash buyers has probably never been higher.
Economic Overview Florida In Florida, the statewide unemployment rate was 3.3% as of 02/2022, slightly below the national average of 3.8% and down substantially from the peak of 13.9% in May of 2020; pre-Covid it was 3.7%. In Hillsborough County, the February 2022 unemployment rate was 2.9%, the lowest rate since May 2007, while in Pinellas County it was 2.8%, the lowest rate since April 2007. Inflation-adjusted real GDP for the state in 21Q4 was an estimated $1.03 trillion, meaningfully higher than the pre-covid peak of $980 billion in 19Q4. Across the state of Florida, the median sale price of single-family homes in February (the latest data available) rose to $381,481, a 21.1% gain over last year, while the townhome/condo median sale price rose by 24.3% to $290,000. Compared to last year, closed sales of single-family homes in February were down 1.2% while condominium and townhome sales were down 3.6%. Despite the decline in closed sales, prices pushed sales volume of single-family homes in February up 15.5% and townhome/condo volume up 14.8%. Inventories remain tight, and with approximately 27,000 single-family and 15,000 multi-family active listings statewide at the end of February, there is just a 0.9 month’s supply of single-family homes, down about 31% from last February’s levels, and a 1.2 month’s supply of townhomes and condos, down by about two-thirds from last year. Price appreciation in Florida is about 50% above the national average and Florida was the fourth highest-ranked state for price gains in 2021.
Hillsborough County may In Hillsborough and Pinellas counties (combined data), March soon exceed median prices continue to show significant appreciation over last year, with single-family homes gaining 15.3% to $400,000, an allPalm Beach a record. Average prices were time high, and townhomes and condos up 16% to $261,000, also at record levels as well, with single-family homes at $506,786, County in up 12.1% over last year, and townhomes and condominiums at $352,852, up 13.5%. Closed sales of single-family homes during 22Q1 compared to the overheated first quarter of 2021 were population, down by 22.4% while sales of townhomes and condos were down by 23.6%. New listings of singlebecoming family homes compared to 21Q1 were down 20.9%, while new listings of townhomes and condos declined by 8.8%. Month’s the third and days on market is 19 supply of inventory for both types of property is just under two weeks days for single-family homes and 18 days for townhomes and condos, down largest. significantly from the same time last year, but up just slightly compared to last quarter.
The State of Florida continues to grow rapidly from a combination of natural population growth and in-migration, recording an increase in overall population growth that was second only to Texas. The Tampa area is seeing an influx of new residents coming from out-of-state, but also moving in from other areas of Florida, and in fact, Hillsborough County may soon exceed Palm Beach County in population, becoming the third largest. As measured by the Federal Housing and Finance Authority, the regulator of Fannie and Freddie, house price appreciation in the Tampa/St. Petersburg/Clearwater MSA was the 21st fastest out of 268 metros, or in the top 8% in the country. With a booming job market, a growing population, high demand for housing, and exceptionally strong home price appreciation, it’s not hard to see why Zillow recently predicted that Tampa would be the country’s hottest real estate market in 2022. 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.
Pinellas County Single-Family Homes In Pinellas County, the median sale price of a single-family home was at an all-time high of $420,000, up 27% compared to last year. The average price rose 25% to $553,246, also an all-time high. Sales volume of single-family homes in Pinellas County during 22Q1 was nearly $1.7 billion, a 15% increase over last year.
The most expensive single-family home sold in Pinellas County during the first quarter sold for $8.5 million.
Closed sales during the quarter declined 8% compared to last year, to 3,016 while new listings were down 4% to 3,378. There are just 579 single-family properties on the market at the end of the quarter, a half-month’s supply of inventory at a record low. The most expensive single-family home sold in Pinellas County during the first quarter sold for $8.5 million. Days on market for single-family homes in Pinellas County was 18 days during the quarter down from 31 days last year and from 20 days last quarter, while percent of sold price to original list price of 101% was up from the 99% it had been for the past three quarters.
Median Sold Price 500
Aver age Sold Price
$420,000
500
$330,000
300
Thousands
Thousands
350
250 200 150 100 50 0
2020 2021
First Quarter
27%
2021 2022
$553,246
600
400
$442,452
400 300 200 100 0
2021
2022
2020
2021
First Quarter
25%
Dollar Volume
Closed Sales 3500
3,273
2.5
3,016
3000
2.0
Billions
2500 2000 1500 1000
$1,448,145,675
$1,668,589,363
1.0 0.5
500 0
1.5
2021
2022
2020
2021
First Quarter
0.0
2021
2022
2020
2021
First Quarter
8%
15%
Percent Sold Price to Original List Price 98%
101%
2021
2022
First Quarter
New Listings
5,552 3,528
3%
6,558 3,378
Aver age Days on Market
31
18
2021
2022
2021 2021
2022
First Quarter
4%
First Quarter
42%
1788 MCK AY CREEK DR Largo, Florida
5 BEDROOMS | 3 BATHS | 2 , 574 SQ FT
785 ISLAND WAY
Clearwater Beach, Florida
4 BEDROOMS | 4. 5 BATHS | 3,138 SQ FT
Pinellas County Condos and Townhomes The Pinellas County median condo and townhome price of $260,050 rose 21% above prices last year and was at an all-time high. The average price of $376,564 was 19% more than last year and also a record high. Dollar volume of townhome and condo sales during Q1 was 9% more than last year at $886 million. The number of closed sales compared to last year was down 8% to 2,354, while new listings were down 5% to 2,706. Active inventories of 476 units are about a half-month’s supply of inventory and remain well below last year’s levels. In the condo/townhome market in Pinellas County, the most expensive property sold for $5.95 million. Days on market for condos and townhomes in Pinellas County fell to 21 from 48 days in 21Q1 but rose just slightly from the 19 days on market at the end of 21Q4. The percent of sold price to original listing price ratio increased to 100%, the highest level in recent memory.
In the Pinellas condo and townhomes market ...The aver age price of $376,564 was 19% more than last year and also a record high
Median Sold Price
Aver age Sold Price $376,564
400
$316,119 $260,050
300
300
Thousands
Thousands
$215,000 200 150 100 50 0
2020 2021
2021 2022
First Quarter
21%
200 150 100 50 0
2021 2020
2022 2021
First Quarter
19%
Dollar Volume
Closed Sales 900
$810,529,907
$886,431,109
800 700
3000
2,564
Millions
2000 1500 1000 500 0
600
2,354
2021
2022
2020
2021
500 400 300 200 100 0.0
2021
2022
2020
2021
First Quarter
First Quarter
8%
9%
Percent Sold Price to Original List Price 98%
100%
2021
2022
New Listings
5,552 2,842
6,558 2,706
2% First Quarter
Aver age Days on Market
48
21
2021
2022
2021 2021
2022
First Quarter
5%
First Quarter
56%
331 CLEVELAND ST #104 Clearwater, Florida
3 BEDROOMS | 2 . 5 BATHS | 2 ,425 SQ FT
556 16th Ave N
St Petersburg, Florida
4 BEDROOMS | 4. 5 BATHS | 3, 508 SQ FT
Hillsborough County Single-Family Homes Both median and average prices for single family homes in Hillsborough County for the first quarter of 2022 rose to all-time highs. The median price of $395,000 was up 30% compared to 2021 and the average sale price of $475,812 gained 23% over last year. Q1 Sales volume of about $2.15 billion was up 12% over last year.
median and average prices for single family homes in Hillsborough for the first quarter of 2022 rose to all-time highs.
Closed sales of 4,524 during Q1 were down 9% from 2021, while new listings of 5,092 were down 8% compared to last year. There were 803 single-family homes available for sale at the end of March, representing just a half month’s supply of inventory, comparable to both the end of last quarter and at the end of 21Q1. This is the lowest number of active listings for the last several years. The most expensive single-family home sold in Hillsborough County during the first quarter of 2022 was for $6.1 million. Compared to the same period last year, days on market declined 31% to 20. It bumped up just slightly from 17 days on market in 21Q4. Percent of sold price to original listing price rose to 101%, an increase compared to 21Q1’s 99%.
Median Sold Price
Aver age Sold Price
500 –
$395,000 400 –
$305,000
Thousands
Thousands
400 –
300 –
200 –
100 –
0
$475,812
500 –
2021
2022
2020
2021
First Quarter
30%
$385,786
300 –
200 –
100 –
0
2021
2022
2020
2021
First Quarter
23%
Closed Sales
3.0
6000 5000
4,969
2.5
4,524
2.0
Billions
4000 3000 2000 1000 0
2020 2021
Dollar Volume $2,152,573,870
1.5 1.0 0.5 0.0
2021 2022
$1,916,970,050
2020 2021
2021 2022
First Quarter
First Quarter
12%
9%
Percent Sold Price to Original List Price
101%
99%
100%
100%
2% First Quarter
2021
2022
New Listings
5,552 5,510
6,558 5,092
Aver age Days on Market
29
20
2021
2022
2021 2021
2022
First Quarter
First Quarter
8%
31%
2907 1/2 N Boulevard Tampa, Florida
4 BEDROOMS | 2 . 5 BATHS | 2 ,70 0 SQ FT
700 Harbour Island Blvd #219
Tampa, Florida
3 BEDROOMS | 2 BATHS | 1,332 SQ FT
Hillsborough County Condos and Townhomes The median price for townhomes and condos in Hillsborough County rose 31% to $261,000, an all-time high and the highest level of price appreciation across the region. The average price of $314,490 was also at an all-time high and rose 15% over last year. Sales volume increased 2% compared to 21Q1 to nearly $458 million. The 1,455 townhomes and condos sold this quarter was down 12% compared to last year. New listings declined by 10% to 1,638. There were just 217 active listings on the market at the end of the year, which represents less than two weeks’ worth of inventory and is at the lowest level of the last several years. In the condo/townhome market, the most expensive home sold during Q1 in Hillsborough County sold for $3.8 million. Days on market for condos/townhomes was 14 days, down from 34 days in 21Q1 and the same as at the end of 21Q4. Units generally sold for a bit more than full listing price, at 101%, up from 99% of original list price at this point last year and from 100% last quarter.
The median price for townhomes and condos in Hillsborough rose 31% to $261,000, an all-time high and the highest level of price appreciation across the region.
Median Sold Price
Aver age Sold Price
500 –
500 –
400 –
400 –
$261,000
300 –
$208,000 200 –
100 –
0
2021 2020
2022 2021
First QUARTER
25%
Thousands
Thousands
$314,490 300 –
$273,417
200 –
100 –
0
2021 2020
2022 2021
First Quarter
15%
Dollar Volume
Closed Sales 600
3500 3000
2000
1,646
1,455
1500 1000 500
0
Millions
500
2500
$457,583,233
$450,044,821
400 300 200 100
2020 2021
2021 2022
First Quarter
0.0
2021 2020
2022 2021
First Quarter
2%
12%
Percent Sold Price to Original List Price 99% 99%
101% 101%
100% 100%
100% 100%
2021
1,828
First Quarter
2022
New Listings 5,552
2%
6,558
1,638
Aver age Days on Market
34
14
2021
2022
2021 2021
2022
First Quarter
First Quarter
10%
59%
3507 BAYSHORE Blvd #2301 Tampa, Florida
4 BEDROOMS | 5 BATHS | 4,70 0 SQ FT
16206 REDINGTON DR
Redington Beach, Florida 2 BEDROOMS | 1. 5 BATHS | 1,224 SQ FT
6225 Deen Still Rd
Lakeland, Florida
3 BEDROOMS | 3 BATHS | 3,728 SQ FT