Home Prices Show Largest Monthly Decline Since Onset of the COVID-19 Pandemic

According to the latest RE/MAX National Housing Report, homebuyers finally saw some welcome relief when it comes to prices. The report shows November’s Median Sales Price dropped 2.9% to $330,000 – the largest monthly decline since the pandemic began. It wasn’t the only metric to surprise in November 2021. While the month generally followed seasonal trends such as cooling home sales, several records – including the fewest average number of days homes were listed before selling – were also set. With these complex conditions, the value of a full-time, trusted real estate professional has arguably never been more important.

Homes continued to sell at a fast clip in Nashville, Omaha and Cincinnati – evidence of the continuation of the strong housing market seen nationally this past year. But the low Months Supply of Inventory, down over 30% year over year, also shows just how frenzied this housing market remains. 

As 2021 comes to a close, RE/MAX President Nick Bailey reflects on this past month’s housing performance in relation to the rest of the year and what may be in store for buyers, sellers and agents in the year ahead.

“The market is roaring along, with only half the seasonal slowdown we typically see from October to November,” Bailey says. “The small drop in prices is great news for buyers, and it could be an early sign of some balance coming back into the market.

“The lack of available inventory continues to be a challenge, but 2021 has been a very strong year for home sales. That says a lot about the resiliency of the housing market and the importance of homeownership in people’s lives. With work flexibility, low interest rates, generational factors and continued high demand, we’re heading into 2022 with plenty of reasons to be optimistic.”

In a written statement to Forbes about what the housing market might look like in 2022, Bailey also predicted a continued acceleration of digitization in the real estate industry and shared thoughts around what that may mean for the role of the real estate agent in the modern-day transaction.

“The push toward modernization will continue at lightning speed, yet while more homes are found online and virtual home tours take the place of open houses, the emotional investment and industry-understanding that agents can provide for a complex transaction will remain crucial to the home-buying and selling process,” Bailey said in the statement.

If you’re looking to buy or sell in the new year, on the fence about either or just curious about how the seasonal transition may affect the housing market, here’s the need-to-know data in the latest RE/MAX National Housing Report:

1. Home Prices Experienced Largest Month-to-Month Drop Since January 2020

November 2021 saw an uncommon decline in home prices. Historically, based on data from RE/MAX National Housing Reports between 2015 and 2019, after dropping in January, prices typically rise each month from February through June, then decline each month from July through October. They generally rebound slightly in November and December. The first nine months of 2021 followed this pattern, before October posted an unusual 0.8% price increase, followed by November’s uncommon decline.

Despite declining month over month, November’s median home price was 11.9% higher than November 2020’s $295,000 and marks the 35th consecutive month that home prices have risen year over year. In November 2021, the median of all 51 metro Median Sales Prices was $330,000, down 2.9% compared to October 2021, and up 11.9% from November 2020. No metro areas saw a year-over-year decrease in Median Sales Price. Thirty-nine metro areas increased year-over-year by double-digit percentages, led by Phoenix, AZ at +27.2%, Salt Lake City, UT at +25.3%, and Boise, ID at +24.8%.

2. Buyers Bought Homes at Lightning Speed

The average Days on Market for homes sold in November 2021 was 29, up two days from the average in October 2021, and down 8 days from the average in November 2020. The metro areas with the lowest Days on Market were Nashville, TN at 12, and a tie between Omaha, NE and Cincinnati, OH at 16. The highest Days on Market averages were in Des Moines, IA at 86, Miami, FL at 78, and New York, NY at 69. Days on Market is the number of days between when a home is first listed in an MLS and a sales contract is signed.

3. Housing Supply Remains Constricted

The number of homes for sale in November 2021 was down 17.7% from October 2021 and down 30.1% from November 2020. Based on the rate of home sales in November 2021, the Months Supply of Inventory decreased to 1.2 compared to 1.4 in October 2021 and decreased compared to 2.1 in November 2020. A six months supply indicates a market balanced equally between buyers and sellers. In November 2021, of the 51 metro areas surveyed, zero metro areas reported a months supply at or over six, which is typically considered a buyer’s market. The markets with the lowest Months Supply of Inventory were a tie between Denver, CO and Seattle, WA at 0.5, and another tie between Albuquerque, NM and Manchester, NH at 0.6.

The five-year average for October-to-November inventory is a decline of 8.9%, slightly over half of the drop of 17.7% in November 2021.

If homebuying or selling is on the horizon for 2022, rest assured RE/MAX agents are prepared to navigate any environment on behalf of their clients. Contact your RE/MAX agent today if you’re ready to make a move.

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