Sales prices in my home subdivision of Oak Meyer Gardens, aka OMG, aka Armour Hills Gardens, rose 15 % in 2021 over the previous year. The average sales price in Oak Meyer Gardens in 2021 was $358,623, which is a 15% increase over the average sales price in 2020 ($311,350). I remember when I started in real estate back in 2006, and my supervising broker told me that a 5% annual rise is a healthy, average rate of growth for real estate. A 5% annual return on any investment is pretty great, especially if you hold it long term, but 15% is outstanding.
Why the Big Price Increase?
So what do we attribute this aggressive growth to? Low interest rates, low housing inventory, and high demand. With mortgage interest rates around 2%-4% in 2021, buyers could afford more debt and higher sales prices because of low monthly payments. Each listing was swarmed with buyers, and those buyers felt confident competing in bidding wars and submitting crazy high offers because they could afford the low monthly payments. We live in a popular area of town, Brookside, and will enjoy stability even in rough times. But in boom times, our prices are rising fast.
Will Prices Continue to Rise?
Everyone wants to know if prices will hold or if we are heading for a crash. Experts expect prices to rise, but not to outpace 2021. Experts do not expect a crash or a bubble to burst. Mortgage rates will rise gradually, but remain low by historical standards. The low housing supply and high demand will be a lingering issue, keeping sales strong. My prediction is that we will see another big year in Oak Meyer Gardens and Brookside with high demand and an increase in sales prices. At some point, mortgage interest rates will reign in buyers from making such wild offers and possibly limit the bidding wars – maybe when rates are well over 4%, which may not be this year. I do not foresee a decline or crash in our area, and it should continue to remain a seller’s market.
If you are curious about the value of your home or neighborhood, contact me and I’ll research it for you.