National Housing Market Setting Records
The pandemic’s effect on the real estate market has been quite the opposite of what many experts feared at the start of the outbreak — as inventory dwindled, home prices and sales both soared in 2020.
According to the latest numbers from Redfin, the national median home sale price rose 14 percent year over year to $330,500 while the number of sales rose by 20 percent in 2020. Such high home price growth has not been observed since 2013, when it was 14.5 percent at its highest in July, while sales numbers are not far from the year long high set last October at 25 percent.
Despite widespread unemployment and uncertainty surrounding the pandemic, record-low inventory is the primary driving force behind this type of ultra-competitive market. New listings are down 17 percent from December and 6 percent year over year, while active listings (the number of all homes for sale in a given month) were down 24 percent in 2020.
The median home for sale stays on the market for 34 days (down from 57 at this time last year), while the months of supply is at a historically low 1.6 percent.
All major cities in the United States saw its home prices increase — some dramatically (29 percent in Camden, New Jersey, and 26 percent in Allentown, Pennsylvania) and others moderately (3 percent in San Francisco and 5 percent in New York).“Buyers were eager to make offers and make them quickly to take advantage of historically low mortgage rates while they last. But many homeowners who want to move feel stuck with limited options of homes to move to, frustrated about homes finding buyers within hours of hitting the market and defeated after repeatedly losing out in bidding wars.”
In keeping with the professional exodus out of expensive coastal cities during the pandemic, cities such as San Francisco and San Jose (downtown Boston) saw the largest numbers of homes put on the market while cities like Salt Lake City and Allentown saw their their active housing supply cut by 66 percent and 55 percent, respectively — a situation that led to uncharacteristic bidding wars in many places.
The U.S. housing market is setting records despite a pandemic.
The number of existing home sales across the country grew by 24.7 percent to 5.86 million last month compared to the 4.72 million homes sold in June, according to a new report from the National Association of Realtors.
July also saw the first time the median home price exceeded $300,000. The median price last month was $304,100, up 8.5 percent year-over-year from $280,400.
“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” Lawrence Yun, NAR’s chief economist, said in a statement.
Yun attributed the changes to homebuyers now working from home looking for larger homes, adding that he expects the trend to continue into 2021.
Total housing inventory dropped to 1.5 million last month, down 2.6 percent from 1.57 million in June.
Just over two-thirds of homes sold last month were on the market for under a month and all-cash deals accounted for 16 percent of sales. Distressed sales represented less than 1 percent of July transactions.