Profit margins on median-priced, single-family home and condo sales jumped 47.2% in the third quarter of 2021, reaching the highest level in a decade. The median price for all homes, including condominiums and multi-family dwellings hit $310,500, according to the real estate data firm ATTOM.
For single-family existing homes, the median price rose 16% to $363,700 (22.9% in the prior quarter), an increase of $50,300. Nationally, the average seller fetched more than $100,000 over what they originally paid.
Prices rose in 99% of 183 measured market areas in the third quarter. More than three-quarters of these markets saw double-digit percentage gains.
Boise, ID, one of the nation’s hottest real estate markets during the pandemic, led the way during Q3, with sellers making an astonishing 130.3% over what they paid. Rounding out the Top 5 were; Austin, TX, Naples, FL, Ocala, FL, and Salt Lake City, UT.
The most expensive markets in America during the third quarter were San Jose, San Francisco, and Anaheim, CA, plus Honolulu, HI, where median home prices topped $1 million.
Driven by a housing shortage, housing prices were already on a steep rise in 2019. As the pandemic hit in spring 2020, the market briefly dipped, but by June, was steaming along again.
With super-low mortgage rates - and the financial impact of the pandemic largely passing over middle- and upper-income households - a desire for more space became a hallmark of COVID-19 quarantine protocols. Prices rose as the already thin supply of homes for sale dried up.
A small seasonal slowdown finally came in the fall and winter 2021, and still-rising inflation is causing the Fed to tighten money policy more quickly than it had originally indicated.
Though officials have indicated interest rate hikes will begin in spring, a reduction in the central bank’s bond buying program is already underway. Mortgage rates will likely continue to rise.
Housing analysts generally expect more homes to hit the market in 2022, and that additional inventory, combined with the higher mortgage rates, should markedly slow price increases. However, experts expect sellers will continue to see strong profits well into 2023.