The New Normal: A Strong Housing Market Expected to Continue into 2021
The New Normal: A Strong Housing Market Expected to Continue into 2021
FEWER LISTINGS EQUALS A SELLER’S MARKET
Inventory (e.g., number of homes for sale) has been dwindling in the country’s top 100 metro markets since early 2020. It is currently about 1.47 million units, which is a decline of 19.2% from one year ago – and the lowest point since 1982.
Fewer listings creates an advantageous housing market for sellers right now because buyers have to act fast to snap up available homes. As a result, most properties only stay on the market for about 21 days before they are sold.
And thanks to tough competition for homes (often resulting in bidding wars between buyers), sellers are enjoying higher net returns on their listing. The nationwide median home price in September rose $311,800, which translates to about15% more than just a year ago.
LOW MORTGAGE RATES, BIGGER PLAYING FIELD BENEFIT BUYERS
People used to base their next home purchase on commute times and school districts. Now, thanks to the pandemic shifting the focus of jobs and work, they are free to consider how and where they truly want to live. Surveys show that quieter neighborhoods, home offices, updated kitchens, and access to the great outdoors are preferred.
The Search for these criteria is driving residents out of the densely populated metropolitan areas and into the
“Even in the uncertainty that is 2020, our country still views real estate as a sound investment.”
suburbs, which opens more inventory possibilities than buyers could consider pre-pandemic.
Now that 30-year fixed-rate mortgage rates dropped to 2.81% in mid-October, buyers are afforded the opportunity to buy nearly #32,000 more home than they could one year ago. So even though home prices are higher now, it’s more affordable to buy a home now than it was last year.
RECORD-SETTING YEAR FOR HOME SALES IS JUST THE BEGINNING
Despite the seemingly adverse buyer conditions, 2020 experienced a 14-year high number of home sales, NAR reports. Existing-home sales (including single-family homes, townhomes, condominiums and co-ops) rose 9.4% across the nation in September to a seasonally adjusted annual rate of 6.54 million. That’s a 21% increase from a year ago!
All of the aforementioned factors indicate that the housing market is poised to remain strong as we head into the new year. And experts believe they could “buoy the house market for years to come.”
Sources: 1. Housing Wire 2. Forbes 3. NAHB 4. CNBC 5. National Association of Realtors 6. Business Insider 7. Realtor.com 8. Wealth Advisor 9. Washington Post
10. National Association of Realtors 11. Axios Media
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