Existing-Home Sales Rise by 7% in September 2021, Surpassing Estimates
The median price (MP) for a US family home stood at $352,800 in September 2021, a decline in the MP. The last time the MP of a family home was at this level was November 2020, increasing ever since (in April 2021, it was $376,600, and in August 2021, $390,900).
Nevertheless, home sales increased by seven percent in September compared to August, rising to an adjusted annual figure of 6,300,000 units sold throughout the US. However, this figure is 2.3% less than the volume sold in August of 2020 and indicates two real estate trends:
1 The US economy is growing as people buy more homes.
2 The MP of every purchase reflects a declining tendency.
(Statistics used include co-ops, condos, townhouses & detached houses)
Arguments for these real estate trends in 2021
The price spike could be due to more offers entering the market. After a significant weakening of construction activity due to recent pandemics, the pace of new home commissioning rose by the end of 2021. And it’s anticipated that more new offers will enter the market in 2022. A big part of those offers is in the medium segment, which could explain the dip in the MP, as construction companies want to increase their cash turnover, recovering from bottlenecks in supply chains.
Another reason is that low mortgage interest rates come to an end soon, and people are rushing to secure their home purchases before a predicted interest rate rises. This has already started and is expected to continue in early 2022. Applications for 30-year mortgages have increased, contributing to halting the future demand. According to recent data, the mortgage interest rate in September 2021 was at its 6-month peak. It is expected that the US economy will recover further in 2022, so the 6-month should easily transform into 9-month and 12-month peaks.
In the previously mentioned statistics, the average home receives an offer within 17 days compared to twenty-one days a year earlier. 86% of these offers are accepted after being on the market for less than one month. To predict the time from offer to sale, this should take 2.4 months. Compare this figure to 2.7 months in September 2020 and 4 months during the peak of the Covid pandemic. Neither of these numbers is bad; according to realtors, any number below 5 months indicates a tight market.
Apart from southern parts of the US, sales in the housing market have increased yearly. In the South, they remain unchanged or are in decline.
As for price segments, the most significant increase is seen in the upper and medium price segments. Sales of properties with a price tag of less than $250,000 are declining. This could also signify that buyers want better housing conditions for their families and themselves, so they’re ready to upgrade today while the affordability of mortgage interest remains. The share of first-time purchasers in September was 28%.
Conclusion about real estate price trends
April, May and June 2020 delivered some of the worst figures in the price of homes. From July 2020, the situation began to improve and has been growing ever since. Since August 2021 (or June – depending on which numbers to take for the analysis; we’ve taken ones retrieved from the United States Census Bureau, www.usa.gov), we see a steady decline in the MP of homes. However, the US house market enters 2022 in a strong position with all the basics required for growth.
Thus, if our reader hasn’t yet purchased a new home for their family, it’s time to consider this before prices increase significantly.
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More about DGY
DGY is a real estate investment and property management company. Our experts have an impressive experience in turning businessmen into smart real estate investors. We collect limitless opportunities throughout the world’s best real estate markets and help our clients implement the best deals. We take care of all due diligence and customize documentation while your income grows. We also provide you with property management services so you can forget about the tiresome maintenance of several objects and entrust this process to professionals.
Investment advice and recommendations
DGY is an investment company that takes care of every client and helps them become successful investors. With the help of an investment experience and a well-thought plan, we will help you examine the market, choose a strategy specifically for you or your business, and calculate future costs to start making money with real estate investment.
In order to invest in real estate, you should consider how you will run your management in Ukraine. DGY will help you eliminate all possible pitfalls at an early stage as a personal project manager will be assigned to your case. They will assist you in choosing the project according to all required objectives.
DGY Investments takes care not only of purchasing property but also renovating an existing one. With the help of a thorough plan and estimating, we will thoroughly prepare a property for sale. Our professionals evaluate an investment property and create a strategy that includes the costs for renovation, possible taxes, fluctuations on the market, etc. Therefore, our clients are able to resell the renovated properties in Ukraine with more than 15-20% profit from the initial price.
Before our clients decide to deal with real estate investing, they consult with our experts concerning details such as the necessary documents needed to purchase a property and successfully run all the processes connected to it.
Therefore, if you are eager to invest in Ukraine, it’s essential to have all the paperwork done correctly, and that’s the moment when our team of experts takes care of this step. DGY Investments helps investors buy real estate property, manage the paperwork, start preparing relevant documents for purchasing realty in Ukraine, and close the deal successfully.
Real estate investment opportunities in Ukraine
When an investor decides to invest in real estate in Ukraine, the most affordable way to attain stable passive income is through buying residential real estate. Investors can expect to receive a regular monthly payment from their tenants at a fixed monthly amount, unaffected by inflation or other unforeseen circumstances. The amount of rental income will vary depending on the size, type of property and location. For example, buying an apartment in Ukraine’s capital Kyiv is beneficial to investors due to offering a large working population, central location and affordable prices. Hence, the minimum price of renting a decent one-bedroom apartment in Shevchenkivskyi District will be around $1000 per month in 2021, followed by Pecherskyi District with a cost of $850 per month. Besides, investing in real estate in Ukraine annually brings clever investors up to 15% of yield, attracting many business people every year.
Properties for investments in Ukraine
Ukraine has a giant sector for real estate investing. Businessmen who come there all over the world often choose between investing in residential and commercial properties. The main advantage of buying property in Ukraine is the affordability of prices on the houses and apartments. For instance, if you invest in real estate in a historical district, a luxurious apartment will cost you around $85k only.
How to invest in Ukrainian Real Estate
In order to invest in Ukrainian real estate, you should take into account a list of crucial factors. The first one is to choose what kind of realty you are going to invest in: residential or commercial. It is vital as it should comply with Ukrainian real estate law. The second tip is to identify the purpose of purchase in order to make a strategy for the property. For instance, you may purchase the property for your own use or buy it for lease. The next step is to calculate the taxes and what kinds of taxes are payable during the purchase, owning, or selling. Also, to invest in real estate properly, you should keep in mind currency control rules in Ukraine to sell a property and get a higher profit.