December home sales increased more than 20% year-over-year while establishing a record low for inventory
The year 2020 was unforgettable in essentially every way (understatement alert!), but the performance of the housing market in the second half of the year was especially remarkable. The fact that 2020 ultimately posted a number of highlights in the RE/MAX National Housing report’s 13-year history is definitely worth noting. Compared to the same time period a year ago, December home sales increased 21.9%, defying past seasonal slowdowns. What’s more, the month also set multiple December records. According to the RE/MAX National Housing Report for December 2020:
• The Average Days on Market was 37, over two weeks less than the 53 days a year ago.
• The Median Sales Price of $290,000 was up 9.4% year-over-year.
• Months Supply of Inventory fell to 1.8, which was less than half of December 2019’s 3.9.
“The very strong sales total in December – over 20% higher than a year earlier – reflects just how frenzied the market was as we entered 2021. And when you look at the entire last half of the year, you see sky-high demand for housing across the country,” RE/MAX Holdings CEO Adam Contos says. “Buyers are dismissing the potential constraints of rising prices and limited inventory to boldly move ahead with their plans to purchase and own a home. We think that says a lot about the lasting appeal of homeownership.
“Many people want to own their home, not rent, and the low interest rate environment is helping them do it. We expect to see more sellers enter the market this year as they take advantage of the favorable conditions and the greater mobility of working remotely. That, along with gains in construction, would help create more options for buyers, leading to what could be a very big year for sales.”
After the pandemic’s initial impact on the housing market last spring and early summer, 2020 ended up seeing the following report highlights since the first report in 2008:
Home Sales: July (the new record), August, September, October and December make up 5 of the top 10 months of sales
Inventory: August through December became the five lowest months in report history, with each month’s inventory lower than the previous month’s; that comes to 7 of the top 10 months with the lowest inventory being in 2020
Days on Market: September through December comprise the four months with the fastest average time for a listing to sell; in other words, 2020 saw 5 of the top 10 months with the report’s fewest Days on Market
Median Sales Price: With a median sales price of $290,000, August, November and December tied with the highest mark in report history; that means 2020 had 9 of the top 10 months with the highest Median Sales Price
So, what does all this mean for the housing market in 2021? Only time will tell, but with the ingredients of a limited supply of homes for sale, rising prices and a greater shift in mobility for many Americans, the recipe seems ripe for a potentially historic 2021.
Some highlights of the latest data found in the RE/MAX National Housing Report include:
1. December Home Sales Increased Defying Typical Seasonal Slowdowns
Of the 53 metro areas surveyed in December 2020, the overall average number of home sales is up 6.2% compared to November 2020, and up 21.9% compared to December 2019. Coastal metros may be seeing an uptick in their local markets as year-over-year sales percentage increases were led by Los Angeles, CA at +42.7%, New York, NY at +40.6%, and Hartford, CT at +39.0%.
2. Homes Sold (Really) Fast
The average Days on Market for homes sold in December 2020 was 37, up one day from the average in November 2020 and down 16 days from the average in December 2019. Days on Market is the number of days between when a home is first listed in an MLS and a sales contract is signed. The metro areas with the lowest Days on Market were Omaha, NE at 17, and a two-way tie between Boise, ID and Cincinnati, OH at 19. The highest Days on Market averages were in Des Moines, IA at 93, Miami, FL at 84, and New York, NY at 71.
3. Competition May Be Stiff
The number of homes for sale in December 2020 was down 17.9% from November 2020 and down 33.0% from December 2019. Based on the rate of home sales in December 2020, the Months Supply of Inventory decreased to 1.8 compared to 2.1 in November 2020 and decreased compared to 3.9 in December 2019. A six months supply indicates a market balanced equally between buyers and sellers. In December 2020, of the 53 metro areas surveyed, two metro areas, Miami, FL and Indianapolis, IN, reported a months supply at or over six, which is typically considered a buyer’s market. The markets with the lowest Months Supply of Inventory were a two-way tie between Albuquerque, NM and Boise, ID at 0.6, and Salt Lake City, UT at 0.7.
By helping buyers and sellers navigate everything from bidding wars to inspections and prepping a home for sale, we are prepared to guide clients through any environment. Contact Maritza today if you’re ready to make a move.