Kevin Waugaman has seen wildly different types of real estate markets during his career.
Waugaman, who started in real estate in 2005, says he’s seen really good market cycles and really bad market cycles.
“We happen to be in a good one, from a perspective of homeowners,” Waugaman said.
The CEO of Berkshire Hathaway HomeServices Florida Network Realty recently talked to the Business Journal about what’s going on in the market and what to expect in the new year.
The below Q&A has been edited for clarity and length.
Have the holidays been busy this year in local real estate?
It is busy. Historically, it’s generally between Thanksgiving and New Year’s that written business falls off. There’s still lots of closings that take place.This year, I would say it is somewhere between the historic norm and last year. Last year, 2020 coming out of Covid, it was all charged up.
Looking at the stats for our MSA, there’s still a 1.4-month supply of inventory. We still have a lot of demand. It’s a strong market for this time of year.
What are your expectations for 2022?
Going back to that 1.4-month supply, that’s one of the leading indicators of where the market is. Closed sales and price appreciation, those are more lagging indicators.
So looking at the inventory, and with interest rates still low right now, we see continued demand next year. Unless the builders can deliver beyond the labor shortage and supply chain issues, we’re going to continue to be in a position where it’s more of a sellers’ market.
Over the past two years, we’ve had low inventory and the median price in our MSA is up 30% in that span. Do we see that going on for much longer? Probably not.
Does that mean we can get back to a more balanced market? I don’t see that happening in the short-term next year. What that means is we will continue to have appreciation over the historic rates but maybe not to the extent that we have seen the last few years.
We still have strong population and economic growth in our area, and we don’t see that slowing down in 2022 or beyond.
What are things that could potentially change the market?
One wild card is inflation. Does the Fed move sooner than later, and what does that do to mortgage rates? We’ll be watching that.
What are top things for sellers to know in 2022?
There are three key items. One is where prices are, which is great.
Two is what is a buyer’s ability to afford a property. That’s still pretty good because of mortgage rates being so low, even as price appreciation has happened.
And then three is “is there a supply/demand environment that is to my benefit?” So those three things show it is still strong for sellers.
Also look at median time to contract. It’s been cut in half. In October 2020, time to contract was around 35 days, and now it’s down to 16. That’s another sign of continued strength.
Beyond that, make sure you still get the pricing right. You’re starting to see buyers who are extremely educated. There are different things that buyers are looking for now, so if you can work with a Realtor and highlight those things as you get your property on the market and stage it well, that is important.
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