2021 Trends & Indicators Recap

While change was the constant for 2020, the battle of supply and demand was the front-and-center theme for 2021.

The combination of a booming stock market, extremely low interest rates, once-called ‘transitory’ inflation that has become increasingly sticky, and the housing shortage is creating a juxtaposition of opportunity and chaos. 

General interest in real estate accelerated, with Nest Seekers Consumer Sentiment data indicating the ever-growing marketplace welcomed over 2,500,000 Absolute Unique Visitors and over 18,000,000 Page Views to nestseekers.com in 2021.

The housing shortage is a continued opportunity for builders, with recent data indicating that we 5.24 million units short of satisfying current demand. Supply chain disruptions, labor shortages, low supply of resale homes, exuberant buying, and rapid household formation by Millenials are all driving factors in this demand, which could be a long-tailed catalyst for the homebuilding industry. Additionally, the number of resale homes hit an all-time low during the week ending on November 28, 2021, with active listings falling 23% from 2020 and 42% from 2019.

With 78% of all US markets hit with double-digit increases, changes in home prices are now outpacing those in income. CNBC reported that over the last decade, the median home price rose roughly 30% and incomes crept up just 11% over the same time period. Over the last 50 years, the difference is even more striking; after accounting for inflation, home prices have jumped 118% since 1965, while income has only increased by 15%, thus indicating that the pandemic accelerated a major divide between home values and income.

For now, it seems prices have leveled off somewhat, but uncertainty remains.

That said, first time home buyers have more skin in the game than ever before with 32% putting more than the standard 20% down and the vast majority of loans being fixed rate.

NS Market Top Notes

NYC

In 2021, we saw NYC come back with a vengeance, with prices souring to pre-COVID levels. Now it seems things are starting to see things level out, and after 13 consecutive months of growth, closed sales in New York have declined in back-to-back months. For the last 11 consecutive months, the number of new lease signings increased year over year, but at a slower pace.

Nest Seekers opened our new Billionaire’s Row flagship store earlier in 2021, thus laying the foundation to capitalize on the city’s bounce back. 

Manhattan: 

Average Listed Price: Trending up .5% from 2020

Total Active Sales: Trending up 3% from 2020

Average Days on Market: Trending down 19 days from 2020

Total Sales Volume: Trending up 44% from 2020

Total Recorded Sales: Trending up 6,802 sales from 2020

Average PPSF: Trending down 1% from 2020

GREENWICH

The neighborhood trends seem to indicate that while many buyers from New York City have chosen to move to the suburbs, they still value convenience and community. Greenwich is a town of 65,000 +/- people spanning ~60 square miles, and combines New England countryside living with small, but bustling, villages/town centers.

Greenwich:

South of the Parkway Sales Volume: Trending up 184% from 2019

Riverside PPSF: Trending up 23% from 2019

Cos Cob Average Sales Price to Assessment: Trending up 19% from 2019

COLORADO

We also welcomed Colorado-based Day-Palazola Group into the Nest Seekers family this year, and look forward to servicing the ski towns of Breckenridge, Vail, and Aspen. Colorado resort destinations saw total dollar volume sold increase by more than 29% throughout 2021, with Vail alone seeing a 50.5% increase in volume. Mountain luxury is no longer defined as strictly being on the ski hill, there is strong desire for summer activities like golf, mountain biking, fly fishing, sailing and hiking, and local festivals, thus attracting many new full-time residents.

Colorado (Summit County):

New Listings: Trending up 1% from 2020

Average Sales Price: Trending up 26.5% from 2020

Months of Inventory: Trending down 47.3% from 2020

Days on Market: Trending down 55% from 2020

BEVERLY HILLS

The luxury markets in Beverly Hills and Bel Air continue to show strength, with off-market transactions reigning over public MLS listings, and up to 60% of homes selling before they even hit the market. Angelenos simply want what other can’t have. Beverly Hills top producer Dylan Eckardt explains, “I had three clients call me last week asking if I had anything in the $20 million range off-market. I replied back and asked if they had seen what’s on-market… and they said ‘no, but we want something that no one has seen yet.’ It’s unbelievable.” 

Beverly Hills:

Average List Price: Trending up 38% from 2020

Total Recorded Sales: Trending up 93% from 2020

Average Days on Market: Trending down 21.1% from 2020

Average Discount to List Price: Trending up 2.3% from 2020

HAMPTONS

It seems that the Hamptons market is running a bit in front of Beverly Hills, but still experiencing much of the same shortage of inventory. JB Andreassi, Nest Seekers agent and star of Selling the Hamptons on Discovery+, says, “It’s been slower out here generally speaking. The combination of holidays, lack of inventory and continued marked-up product has slowed transactions. We are doing everything in our power to get people to list homes. Buyer demand remains strong but no quality inventory is available to meet the demand.” 

Hamptons: 

Average Price: Trending up 17% from 2020

Total Recorded Sales: Trending down 43.9% from 2020

Average Days on Market: Trending down 65.9% from 2020

Average Discount to List: Trending up 2.9% from 2020

FLORIDA

Miami and Palm Beach continue to be nationwide hot spots, because “everyone still wants to move to Florida… or at least get a foot in the door” says Nest Seekers Palm Beach broker Debbie Ginsburg. 

Palm Beach Island

Average Single Family Sale Price: Trending up 72% from 2020

Median Sale Price Condo: Trending up 57% from 2020

Active Single Family Listings on PB Island: Trending down 60% from 2020

Single Family Closings: Trending down 16% from 2020

<1 Month Supply Single Family: Trending down 74% from 2020

Branded new development projects are driving the Miami market and trending towers include Casa Bella by B&B Italia, Baccarat, Bentley, and Missoni Baia. Meanwhile, the greater Palm Beach area has more record-breaking $100 million+ deals in the pipe.  

Miami:

Average Sale Price: Trending up 11% from 2020

Total Recorded Sales: Trending up 8% from 2020

Average PPSF: Trending up 13% from 2020

2.2 Months Supply Single Family: Trending down 54% from 2020

LONDON

London, in turn, remains the most expensive of any region in the UK, but it also continues to be the region with the lowest annual growth. Average prices increased by 6.2% over the year to October, up from 2.8% in September. We are starting to see momentum build in the region, however, due to an influx of foreign interest at the top end of the market. Thus it seems that London will now experience much of the same activity volume coming into 2022 that we saw in the US last year.

Prime London:

Average List Price: Trending up 6% from 2020

Average Days on Market: Trending down 15% from 2020

Number of Transactions: Trending up 6.8% from 2020

.6 Months of Inventory: Trending flat from 2020

The Year Ahead

In 2022, as interest rates continue to rise, prices will stabilize, and inventory will begin to reach equilibrium. Cash will continue to be king, unless we are talking cryptocurrency.

The number of transactions without mortgage contingencies hit an all-time high in 2021, as buyers faced stiff competition for prime property. Simultaneously, we saw a substantial number of transactions involving cryptocurrency; including a $22.5 million penthouse at Arte Surfside in Miami trade in crypto in May 2021, and the launch of the first pre-construction condo that accepts crypto, The Waldorf Astoria Residences Miami. 

Similarly, we will begin to experience using NFTs in real estate to improve and streamline the closing process and work towards instantaneous settlement by using blockchain to register title, surveys, transfer a property, and complete all background diligence, thus ensuring the transaction’s integrity.

In 2022, amenities will keep getting bigger and better. We have seen the evolution of amenity-rich spaces for years, but smart homes, personal spas, competitive fitness centers, and pet services are now expectations, not wish-list items. 

New housing starts will be begin to catch up to demand *if* we are to at least partially quell supply chain issues. Once production and delivery time lines normalize we might even have an over-abundance of materials which will push downward pressure on prices…. Though this is likely years away.