Active Home Listings Reach Record Low as 2020 Nears an End
Just as the United States economy proved to be a bit of a roller coaster in 2020, the housing market saw similar shakeups and interesting trends. Now, with the year coming to a close, we can see just how wild things were. Additionally, even as cold weather takes over, the market for homes appears to be quite hot.
According to the latest data from Redfin, active home listings fell to just 610,465 (across the more than 400 U.S. metro areas that the site samples) as of December 20th. That’s not only a record low but also marks a 31% year over year decrease. Listings also managed to stay below 2018 and 2019 figures at any point throughout this year.
One of the key reasons why active listings have fallen so dramatically is that pending home sales are way up. As of this month, a four-week rolling average of pending sales has risen 34% year-over-year with a total of 43,402. However, the graph of these figures tells a more interesting story as they were in-line with 2018 and 2019 in the early months of 2020 before dipping significantly in April and May, only to roar back in the summer and reach their highest point in the fall.
With the boom in sales also comes a rise in sale prices. The latest figures show the median home sale price as of December 20th was $320,714 — up 14% YOY. This comes after the median price broke through the $300,000 mark in July. For comparison, 2019’s highpoint was in the summer when the median hit $290,020 before retreating some to end the year at $281,950.
Reflecting on the past year and looking ahead to the next, Redifin’s chief economist Daryl Fairweather remarked, “Going into the new year, it will truly be out with the old, because there will be very few homes from 2020 left on the market. So those who resolve to buy a home in 2021 may need to wait with bated breath for sellers to list their homes. Redfin’s forecasts suggest the new year will bring many more new listings, but they will likely be snatched up quickly.” Fairweather added, “So if you are a homebuyer, now is a good time to get pre-approved for a mortgage, and come up with your wishlist, so you can act quickly when your dream home hits the market.”
It’s really not surprising that, following extended lockdowns, Americans in many parts of the country may be looking for a change of scenery. Moreover, the pandemic may have also exposed some flaws in the set-ups families had, leading to big moves, upgrades, and retreats. All of this prepares what is sure to be another interesting year for the housing market in 2021.