The Four FACES OF 2022

The best way to understand the 2022 luxury residential market is to look at it from a quarterly point of view. Each quarter demonstrated very different market characteristics.

First Quarter

The first quarter of 2022 started strong, continuing the pace set in 2021. Escalating demand and some of the lowest inventory on record brought home prices to new heights. Two unique fixtures of the 2021 market – multiple offers and homes being sold over asking price – remained in the first quarter. A severe lack of inventory was the main reason why the number of sales was not higher.

Prices continued their upward streak, rising by 5.9% for single-family homes and 20% for attached properties in the first quarter of 2022 compared to the last quarter of 2021.

Meanwhile, inventory levels dropped 27.1% and 27.8% for the same period, respectively. Somewhat atypical was the robust buyer demand exhibited during the first quarter of 2022, since the first part of the year is traditionally considered a slower season for real estate (except for snowbird markets). If new properties came on the market, they were snatched up quickly.

Quarter 1 Market Statistics

Median Sold Price

Average Monthly New Inventory

Average Monthly Inventory Sold Homes

$1,594,500 5,210 14,236 20,393

$1,100,000 1,976 5,292 7,278

Second Quarter

The second quarter began to signal change following the Federal Reserve’s March 2022 0.25% interest rate hike –the first increase since December 2018. The S&P 500 decreased by 16.1% in the second quarter1 – the highest quarterly decline since the first quarter of 2020. Concerns over inflation and the impact of the Ukraine war also started to breathe an air of uncertainty into the high-end property market.

Adversely, luxury home prices continued to rise and affluent buyers finally began to feel the pinch of higher interest rates.

3,008

7,273

10,096

Newfound buyer hesitancy coincided with the typical spring uptick of new listings, producing the first notable increase in luxury home inventory levels since September 2019. Inventory levels rose by 69.1% for single-family homes and 35.4% for attached homes from the first and second quarters – faster than most industry experts’ expectations. New inventory also increased by 108.6% for single-family homes and 52.2% for attached homes. With this surge of new properties hitting the market, buyers were suddenly presented with more options than they had in the last two years. The number of sales promptly followed suit, increasing 67.8% for single-family homes and 38.7% for attached homes.