Are the salad days over?


By Matthew Blake

The coronavirus pandemic has coincided with the greatest real estate boom in recent American history. The median U.S. home sale price in 2021 was $346,000, according to the National Association of Realtors, which even adjusted for inflation is the highest home sale price since NAR began publishing this stat in 1999. More importantly, total home sales climbed to 6.12 million in 2021, per NAR, the highest since 2006. 

It is worth dwelling on the last number. Despite statistics produced from multiple listings services documenting low inventory of existing homes, and builders lamenting a dysfunctional supply chain plus labor shortage constricting sales of new homes, there were still the highest number of homes being bought and sold since the peak of the mid-aughts housing bubble. Even amid a prolonged pandemic and other disquieting news, 2021 was the salad days for agents and every other professional who touched the record number of transactions. 

Is this already changing in 2022? My colleague Brooklee Han reported this week that new home sales fell for the second straight month. They were down just 2.0% from January, according to federal data, but 6.2% from last February to a seasonally adjusted rate of 772,000. 

While highly important in evaluating the functioning or lack thereof of residential construction, new home sales typically are just about 15% of all U.S. sales. But existing home sales also declined in February to a seasonally adjusted rate of 6.02 million, per NAR numbers. That’s down 7.2% from January, and 2.4% from one year ago. The slight dip might be exacerbated in coming months with the average mortgage interest rate climbing after hovering at around 3% during the pandemic.