Northeast Florida homeowners celebrated another year of record home value appreciation in 2021, with a year over year gain just over 20 percent. The absence of a state income tax, coupled with the year-round outdoor living our area offers, led to an enormous influx of homebuyers from the Northeast as well as California, Chicago and Atlanta, and these new residents can continue the drive to purchase in our area.
Access to our natural resources seemed to be the priority of buyers, with waterfront properties at the Beaches, the Intracoastal Waterway and the St. Johns River commanding the highest sales. Oceanfront properties have certainly been the hottest market, with 11 properties selling between $6.5 million and just over $10 milllion, and the Intracoastal Waterway and St. Johns River waterfront properties provide outstanding opportunities as well. Specifically in the Beaches areas, the median sales price for December was up year over year 21.7 percent!
Overall, 2021 saw record sales in a high-velocity market with record low Days on Market and many sales happening pre-market. Days on market capped out at 18 days, which is a whopping 45.5 percent less than December 2020. Multiple offers were the norm, with buyers offering as much as 20 percent over asking price and/or post-occupancies to sellers to give them time to find a home for themselves. The Beaches areas had over 37 percent of sold homes close over list price – an increase of nearly 25 percent over the previous month of November. At any given moment, our inventory numbers showed record lows, but the movement in the market was astronomical. In fact, 2021 should go on record nationally with the most homes sold in one year.
Many buyers grew weary writing five to six offers on homes and losing out to buyers willing to pay cash, well over asking price and/or waiving inspections or appraisal contingencies. This squeezed out many first-time home buyers from the market or buyers that simply wanted to finance due to the low interest rates. Additionally, with an increasingly hot rental market, investors added to the pressure as they captured up to 25 percent of single-family home sales. Active listings in December were down 38 percent year over year to less than 1 month of inventory. Regardless, with the millennial market moving into the homebuying stage, the buyer’s market is not waning.
We expect 2022 to continue with strong sales and prices, especially due to the persistent lack of inventory. In addition to the pent-up buyer demand, we are also experiencing pent-up seller demand as many sellers would like to enjoy the equity appreciation in their home but have not listed for lack of a plan of where to go. Local home builders should offer some relief, as new home starts in December were higher than normal and this will open up opportunities for buyers as well as giving sellers options to move up or downsize. We do expect more sellers to enter the market as we approach our peak selling season from March to August.
Many predict a moderating or slowed appreciation of prices in 2022 nationally. Our wonderful weather, lack of a state income tax, master planned communities, excellent school options and affordability will certainly play into how our local market reacts. The most determining factor moving in to 2022 will be inventory. Only time will tell in this unpredictable real estate market!
