2021 Annual Market Report
Report Highlights
As forecasted in our Fall report, the real estate market in Essex County slowed down a little in the latter months of 2021 following the boom earlier in the year
The median SFH price jumped to $635,000 in the frenzy of Q2 before easing back to around $610,000 in the second half of the year. Overall the increase for 2021 was a robust 13.4% to $608,000.
The median condo sale price increased modestly but consistently each quarter, and for the year was up 11% to $388,000
In 2021 only 4 of the 34 cities and towns – Lynn, Methuen, Haverhill and Lawrence – had a median SFH price under $500,000, while 17 had median prices above $750,000, with Manchester-By-the-Sea topping the list at $985,000
All towns except Beverly, North Andover and Saugus (all 9%), Newbury (8%) and Manchester By-the-Sea (just 1%) saw double -digit SFH median price increases in 2021
While Inventory was below 2020’s depressed levels and less than half the levels of 2019, sales in 2021 were down only 2%, indicating that properties sold very quickly
Mortgage Rates spent 2021 fluctuating around 3%, closing the year at 3.05%. In January 2022, however, the rate spiked by half a point to 3.56% in just three weeks as the bond market adjusted to the Federal Reserve’s belated moves to end its bond purchases and start to increase rates to combat an inflation that is proving more stubborn than the Fed had expected.
Early 2021 saw a certain level of euphoria with the roll out of vaccines and the opening of economies, but first Delta and then Omicron – not to mention supply chain-induced shortages as we saw on supermarket shelves – caused greater uncertainty as the year progressed. The Fed appeared to many commentators to be taking an overly optimistic view about inflation; its policy reversal late in the year has sparked a jump in the crucial 10-year Treasury yield and hence in mortgage rates, which many experts expect to hit 4% this year.
All these factors make forecasting the housing market more hazardous than usual, but the supply demand imbalance can be corrected only by one of two ways: increased supply or reduced demand