Just in the past few months, the Biden administration announced it would take steps to address a severe housing shortage in the U.S. President Joe Biden now plans to create and sell about 100,000 affordable homes over the next three years using existing funds, according to the White House. As the demand for housing soared early in the pandemic, Americans sought more spacious accommodations for home offices and home schooling. A shortage of homes for sale and the supply chain reduction drove housing prices sharply higher with rental prices following the lead of house prices. With President Biden’s plan, his administration will hopefully limit sales to large investors, allowing instead to help individuals, families, and nonprofits.

The next question is, are we headed for a housing collapse?

HOUSING COLLAPSE INSIGHT

With similar trends as what homeowners saw in the 2008-09 recession, many are worried that a crash is imminent. A major contributing factor to the 08-09 housing market was excess housing supply. With homes already available and more construction, new construction, being built, home prices increased as more supply was available. In today’s market, its quite the opposite. The current housing market is being driven by a limited supply and heavy demand.

So in short, the answer is no. The housing bubble burst isn’t coming but the market will continue to fluctuate as business redefine working standards and family are able to move to other parts of the country and continue to work. If any family wanted to relocate to a better neighborhood, better city, or even a better state, now would be the time. Analysts predict the market will settle towards of the end of the year as 2022 is welcomes and the holidays approach. The demand in some areas will stay high and in others will settle to a normal level but home prices will remain high well into the 2022 year.

FORECLOSURES

In 2021’s 3rd Quarter (3Q), the number of US foreclosures surged 67% year-to-year as homes exited forbearance and bans ended. But compared to a “normal” 3Q in 2019, foreclosures are down 60%. The reason for this surge is simple. Foreclosures in the United States are up dramatically nationwide now that emergency measures to help people stay in their homes have begun to expire.

According to a study, new foreclosures, or starts, rose by 32% from July to October compared to the April-July period – and were up 67% compared to the same period in 2020. While the increases are dramatic, the study says they are particularly pronounced mainly because new foreclosures have been exceptionally low since the start of the COVID-19 pandemic due to emergency aid programs that staved off foreclosures for millions of homeowners. Those programs have begun to expire, and the market is seeing an uptick in starts as a result.

Typically, new foreclosures in the United States average around 40,000 per month. When the aid programs were in effect, that figure was under 5,000. Thursday’s report showed 19,600 foreclosures in September, which was an increase of 24% from August and 102% from September 2020. September foreclosure actions were almost 70% lower than they were prior to the COVID-19 pandemic in September of 2019, and 3Q foreclosure activity was 60% lower than the same quarter that year. Even with similar increases in foreclosures over the next few months, we’ll end the year significantly below what we’d see in a normal housing market.

The report said the newest foreclosures from July to October were seen in Florida (5,400), Illinois (3,600), Texas (3,000), Ohio (2,600), New Jersey (2,100) and New York (2,000).

WORDS TO SELL HOUSES

Most listing descriptions once started with things like “granite countertops” and “wood floors” – but words like “Large,” “great,” “full” and “spacious” were among the most used words to draw homebuyers to real estate listings over the past year, as room to spread out became more important in the pandemic. A research team examined 43 million words from more than 640,000 listings nationwide. They identified trends and compared findings to a 2019 analysis to see how the most popular keywords have changed since the pandemic.

“Granite countertops,” “hardwood floors” and “stainless steel appliances” have long reigned as the most common words in listing ads but fell from the top three spots this year. Instead, many of the most popular adjectives refer to the spaciousness of a home, such as “large” and “great.” Other most common words, in listings for both single-family homes and condos, were “garage” and “parking,” the study found. The popularity of these home description keywords points to the fact that, during a year when planes were grounded and social distancing wreaked havoc, it was the car that helped people escape the confines of their homes and find comfort elsewhere. Beyond specific words, the following were the most popular home features and amenities in home listings:

Single-Family Homes Top 20

Garage
Walk-in closet
Full bath
Open floor plan
Hardwood floors
Granite countertops
Stainless-steel appliances
Laundry room
Additional bedrooms
Fenced backyard
Double vanity
Covered patio
Formal Dining room
Parking
Natural light
Large/spacious living room
Bonus room
Plenty of room
Water heater
Eat-in kitchen

Condos Top 20

Parking
Garage
Hardwood floors

Walk-in closet
Washer/dryer
Stainless-steel appliances
Granite countertops
Full bath
Open floor plan
Shopping/restaurants
Fitness center
Laundry room
Within walking distance
Natural light
Large/spacious bedrooms
Tennis courts
Easy access
Quartz countertops
Move-in ready
Conveniently located

Better Listing Descriptions?

One way to improve on hits to your listings, is to focus on the readers, not the house. A listing description’s first sentence should answer readers’ top question: “Why should I keep reading?” Most of the time it will note the home’s most desired feature. A well-crafted listing description is equivalent to a positive first impression.

Agents should develop an attention-grabbing opening with an eye toward how an audience will react. It should immediately answer the questions “What am I looking at?” and “Why should I keep reading?” An opening sentence doesn’t need to be long, and probably shouldn’t be. Ideally, it’s simple and gets straight to the point by highlighting the property’s most marketable features. Once the description captures a reader’s interest, it should move on to discuss the possibilities of that particular space and paint a picture of the experience a buyer can expect to have if they live there. Agents can also attempt to create a narrative behind the listing that shows readers why they should buy it.

A home with some less then desirable features should be described to them anyway, but by using phrases that are as positive as possible.It’s also crucial to adhere to housing laws when writing a listing and mention any restrictions that may apply.A great listing description will also include a call to action. Ideally, that call should be in language that persuades readers to act fast and to contact an agent.

WHAT’S MY HOME WORTH

The simple answer is:
A house is worth whatever someone is willing to pay for it.

If you're planning to sell a property, the first thing to ask is what's my home worth? Whether you're asking what your home is worth in Florida or what’s my home worth in another state - the process is the same. What you paid for it two or five years ago is sure to be different today and there are several factors that affect property value.

The biggest challenge with determining your home's value is that it is somewhat subjective. If you were to ask, "what's my home worth?" to a real estate agent, an appraiser, or a county tax assessor, you'll likely get different answers from them. While some of the data points cannot be taken subjectively, the interpretation of the differences between your home and what has sold can be. Knowing how to calculate your home's value will prepare you for when you decide to sell, buy, or refinance your home. It may also help you tap into your home's equity and negotiate lower property taxes.

Factors that influence your home value

Several factors may affect the value of a property. Here are just some of them.

Home size (Square Footage)
Age
Location (subdivision and/or 1 mile radius around the home)
Local market conditions
Comparable homes - homes that have sold recently
Renovations and repairs

Once you determine all the factors that influence your home's value, it will be easier to establish more realistic expectations.

When you're trying to determine what your home is worth you ultimately have to look at what has already sold. A quick online search on how to determine your home's value will give you a list of home value estimator tools. According to a survey, 22% of homeowners in the U.S. used some type of online home value estimator tool to determine the value of their home. These automated valuation model (AVM) tools are typically offered by most lenders or real estate websites. AVM tools use public records, such as deeds of ownership, property transfers, and tax assessments, as well as some mathematical modeling, to try and predict the value of your home. So, the recent listing prices and sales in your area will have a significant impact on your home's market value.

Get a professional Comparative Market Analysis (CMA) from a real estate agent.A CMA is used to examine the prices of similar properties that have been recently sold within the same area. Asking a local real estate expert for a CMA will give you a really good idea about your home's fair market value. Real estate agents perform a comparative market analysis to match your home to comparable properties. This helps create a statistical breakdown of what your property may be worth in comparison to nearby properties with similar or matching features. This will help you determine the price to list when selling or the price to offer when buying a home. Although it's not as detailed or as accurate as a professional appraisal, it is quite helpful when listing a property.

Seeking the help of a professional home appraiser is a great service that can give you an accurate report of how much your home is valued at. Banks and other lenders require an appraisal before a mortgage is approved. Hiring a professional property appraiser is a better way to get your home appraised. In fact, about 28% of Americans had their home's value appraised by a professional. Given the convenience of doing so, this shouldn’t come as a surprise. The cost for a complete appraisal will vary depending on the property.

For example, the appraisal rate is higher for larger and more expensive homes. It is part of an appraiser's responsibility to provide a thoroughly researched estimate of a property's value based on several factors, including: The city, region, and neighborhood where the property is located Features and amenities of a property, such as decks, pool, or fireplace Listing, sales, cost, depreciation, vacancies, and other factors for similar properties in the same market Condition of the property, including utility services, heating, and air systems, windows, doors, and other fixtures Whether the property is located in a FEMA flood zone The type of foundation the property sits on Whether any improvements or additional repairs are needed Signs of damage that can seriously compromise the structural soundness of the property, including any damages or structural repairs that have been made Don’t forget to ask the appraiser for a copy of the report when the assessment concludes.

hOUSING MARKET PROJECTIONS

Even though we have several months of 2021 remaining, real estate experts have already begun shifting their focus on 2022 and beyond. While there are many factors that influence the real estate market as a whole, there are several that have the greatest impact on the consumer and will affect buyers and sellers in the year to come.

INTEREST RATES

Mortgage rates are hovering near record lows, and that’s good news for today’s homebuyers looking for homes for sale. When rates are low, you can afford more home for your money. That’s why experts across the industry agree – today’s low rates present buyers with an incredible opportunity. And while mortgage rates are still low today, the data from Freddie Mac indicates rates are fluctuating ever so slightly right now, as they moved up one week before inching slightly back down in their latest release.

Mortgage rates hover near record lows today, but experts forecast they’ll rise in the coming months. However, even as mortgage rates rise, the anticipated increase is expected to be modest at most, and still well below historical averages. Rates remaining low is good news for homebuyers who are looking to maximize their purchasing power.

HOME PRICE APPRECIATION

One of the major storylines over the last year is how well the residential real estate market performed. One key metric in the spotlight is home price appreciation. According to the latest metrics, home prices are skyrocketing this year with as much as a 19% year over year increase being seen nationally.

Price appreciation is expected to slow in 2022 when compared to the record highs of 2021. However, it is still expected to be greater than the annual average of 4.1% over the last 25 years. The Home Price Expectation Survey, a survey of over 100 economists, investment strategists, and housing market analysts, calls for a 5.12% appreciation level next year.

Number of Homes for Sale

An important metric in today’s residential real estate market is the number of homes available for sale. The shortage of available housing inventory is the major reason for the double-digit price appreciation we’ve seen in each of the last two years. It’s the reason many would-be purchasers are frustrated with the bidding wars over the homes that are available. However, signs of relief are finally appearing.

Historically, housing inventory increases throughout the summer months, starts to tail off in the fall, and then drops significantly over the winter. Last year, the trend was different. Historical seasonality wasn’t repeated in 2020 since many homeowners held off on putting their houses up for sale because of the pandemic. In 2020, active listings peaked in April, and then fell off dramatically for the remainder of the year. However, we’ve been building inventory over the last several months as more listings come to the market and it seems this aspect of the market is beginning to normalize.

While it is impossible to predict the future of the real estate market, experts seem to be in consensus on these important factors as we move toward 2022. As a buyer or seller of real estate, it is important to keep an eye on these metrics to ensure you stay as knowledgeable as possible for the future. Understanding the expert projections for the year ahead will keep you up to date on one of the most important investments of your life, your home.

CENTRAL FLORIDA REAL ESTATE RECAP

Orlando’s median home price remained unchanged in August 2021 from the prior month – a record-high $320,000. The median price is 16% higher than August 2020’s $275,000.
Sales fell for a second straight month this summer. In August 2021, sales dropped 4.4% from the previous month.
Homes spent just 25 days on the market in August 2021, which is a record low. That is half the time homes spent on the market during the same month in 2020.
For a fourth straight month, inventory increased, after reaching its lowest point in April 2021. This is in line with national trends from the National Association of REALTORS®.

It’s important to note that interest rates have remained low, which continues to drive demand, especially among first-time homebuyers. Despite the inventory increases, there are still not enough homes on the market to accommodate buyers. As we head into fall and the market continues its cool-down, the seller still has the upper hand. Buyers should have their financing in order and be prepared to make a strong offer.

MARKET SNAPSHOT

ORRA members sold 3,999 homes in August 2021, a decrease of 4.4% from 4,183 homes sold in July 2021. Sales were still 13% higher than August 2020.
Interest rates showed little change, as they remain low. The average interest rate in August 2021 was 2.84%, an increase of .01% over July 2021.
31 distressed homes (bank-owned properties and short sales) accounted for .8% of all home sales in August 2021. That represents a 62% drop over August 2020, when 82 distressed homes sold.

INVENTORY

Orlando area inventory increased 3.2% from July 2021 to August 2021 from 3,524 homes to 3,638 homes. Inventory plunged 39% from August 2020 to August 2021.
The supply of homes ticked up to nearly one month in August 2021. A balanced market is six months of supply.
The number of new listings decreased in August 2021 from July 2021 by 7.1% from 4,710 homes to 4,375 homes.

Florida's Housing Market