2022 HOUSING
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MARKET OUTLOOK
Happy New Year! As we enter 2022, a year I look forward to with hope and optimism, it is my pleasure to provide you with this exclusive Market Report. 2021 was an unprecedented year in the real estate market, with statistics being shattered in nearly every category. As we continue to navigate the current environment, we all seem to be placing a more prioritized focus on wellness and the lifestyle decisions we make in the pursuit of our utmost health and happiness. Where we live and how we live has never been more important. Over the last year, inventory levels for single family homes in local suburban markets reached historic lows and bidding wars in prime categories are now the norm. Average and median home prices on Long Island rose to their highest levels in two decades, up 17% from a year ago and nearly 25% from two years ago, according to Douglas Elliman’s recent Report by Jonathan Miller. In Nassau County, per data provided by the Institute for Luxury Home Marketing tracking single family properties $1 Million and above, a strong Seller’s Market is evidenced by a 23% sales ratio. Year over year, inventory was down 15% while closed sales rose by 30% and overall days on the market fell by 51%. For potential sellers, there has never been a better time to put your property on the market. The urban exodus by individuals in search of suburban primary residences continues, with the aforementioned scarcity of inventory providing an exceptional and timely value opportunity. For buyers, while it is anticipated that the rise in inventory again will take time and slowly return to more seasonal levels, right now remains an incredible time to take advantage of extraordinary buying power, with mortage rates remaining at their lowest levels in years, with average fixed-rates for 30-year conventional mortgages widely available in the low 3% range.
HOUSING TRENDS: According to the 2022 State of Luxury Real Estate report, authored by Luxury Portfolio International, sustainability is a major trend driving the increasing demand for homes in the luxury price point, with 75% of those surveyed stating they will choose their next home with sustainability in mind. Among the concerns luxury buyers say they face are fear of missing out on the latest trends (26%) and having a space that can accommodate remote work (27%), the latter of which was last year’s top consideration during the home search. With more time than ever being spent at home by many individuals, properties offering flexible living and working spaces with easy flow are increasingly in demand. Additionally, the desire for a balanced lifestyle supported by self-care and leisure amenities has led to more common requests for residential features including fully-equipped fitness centers, saunas, treatment and meditation rooms, wine cellars and more. As cited in a recent article by The New York Times, entertaining graciously outdoors in all seasons is also a new trend, with homeowners investing in warming solutions including fire pits, heat lamps, pergolas, upgraded lighting and even installing heated furniture. In terms of new residential construction, price increases in raw building materials and supply chain shortages due to the pandemic over the last year have caused prices for new homes to escalate, therefore strengthening the position of sellers in the current and future resale market. As mentioned in a recent article in Fortune, over the last year, the cost of lumber was up 300% over pre-pandemic levels, with nearly every other building material from windows to concrete and even paint prices rising. The fact that the U.S. is currently under-built by 4 million homes as the largest chunk of millennials are hitting their peak first-time homebuying years, if builders are forced to scale back further, it could mean even fewer homes for sale in an already historically tight - and competitive housing market.
WHERE NORTH SHORE RESIDENTS ARE SEEKING SECONDARY LUXURY HOMES: As so many of my North Shore clients have purchased or are currently in the market for second and third residences, the following summaries derived from Douglas Elliman’s recent Market Reports by Jonathan Miller further illustrate the extraordinary activity evidenced in these top luxury markets: In key South Florida markets, there were large annual sales gains for the fifth straight quarter despite a large decline in listing inventory. Condo sales nearly doubled from the prior year quarter and more than doubled from the same period two years ago. Single family price trend indicators surged annually to record levels. The luxury condo market pace was the second-fastest in eight years as listing inventory fell annually for the fifth consecutive quarter. Prices in the Hamptons continued to rise and set records as market strength shifted towards the higher-end. Price trend indicators were more than fifty percent above the same period two years ago. Listing inventory fell at a near-record rate year over year to the third-lowest level on record, restraining sales. Days on market fell to their shortest amount in more than 15 years of tracking as more than one out of four sales closed in the quarter sold above the last asking price. The market share of sales above $5 million was the highest tracked since at least 2006, while luxury listing inventory fell by half over the past year. Sales levels in Manhattan surged annually at a record rate to the highest total in more than thirty-two years. Sales more than tripled annually to the highest quarterly total in more than thirty-two years. Listing inventory fell sharply from the prior-year quarter but remained above the third quarter decade average. The market share of bidding wars rose to its highest level in three years. Months of supply indicated the pace of the co-op market was the fastest seen in four years. All co-op price trend indicators moved above the prior-year level and from the same period two years ago. All condo price trend indicators fell annually, sharply skewed by the drop in average sales square footage. Condo listing inventory declined from year-ago levels but was consistent with the same period two years ago. The highest market share of luxury bidding wars in at least five years. New development sales more than tripled from the prior-year quarter and nearly doubled from the same period two years ago.
LOCALLY KNOWN. GLOBALLY CONNECTED: As always, The Maria Babaev Team will continue to focus on sourcing local, national and international buyers for our listing portfolio, utilizing Douglas Elliman’s strategic partnership with Knight Frank Residential and their powerful network extending to 51 territories across six continents. Backed by the overall support of Douglas Elliman, New York’s leading real estate brokerage by sales volume with nearly $30 Billion per year in sales and rental transactions, our team benefits from direct marketing access to nearly 7,000 agents and approximately 100 offices operating in cities throughout New York, Long Island, The Hamptons & North Fork, Westchester, the Hudson Valley, Connecticut, New Jersey, Florida, California, Colorado, Massachusetts and Texas.
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For individuals considering a real estate purchase in New York or Florida, The Maria Babaev Team is perfectly positioned to represent qualified buyers in every price category. With over $500 Million in closed transactions, I invite you to contact me today for a complimentary Market Analysis. It is again my pleasure to continue to provide you with relevant, timely and accurate market information, luxury trends, community and cultural event updates and of course, detailed consumer-friendly local area reports available over 90-day cycles.
Warm Wishes for a Happy, Healthy and Successful 2022!
Maria
Maria.Babaev@Elliman.com | 516.287.7716
33 Stirrup Drive, Upper Br