Despite a limited supply of homes for sale across most metros in the U.S., July home sales continued a recent month-over-month incline. It confirms predictions from housing experts made months ago of a housing market turnaround. Reflecting on May home sales, RE/MAX Holdings CEO Adam Contos commented in June on the effect of pent-up demand and how that factor may play out in a major way in the coming months. He also noted he believed the “spring selling season was largely deferred for several weeks.”
Fast forward to August and Contos was right. July home sales rose 8.7% over July 2019 and a staggering 18.6% compared to June 2020 according to data from the RE/MAX National Housing Report for July 2020.
“The sharp gain in home sales in July – which was the best month of home sales in our report’s history – is further evidence of housing’s remarkable recovery amidst the pandemic,” Contos said. “Home sales typically peak in May or June, but this year we’re seeing an overlap of the spring and summer markets. And, as strong as July was, sales may have been even higher if inventory hadn’t been so tight.”
Continued Contos: “Buyers have returned to the market more quickly than sellers, likely spurred on by historically low interest rates and coronavirus-inspired lifestyle changes. Home is the center of life in 2020, and the pandemic has caused people to reconsider their living situations – especially with so many people working from home. So far, buyers have shown they are willing to pay steadily increasing prices, so the months ahead could be very active, especially if more homeowners decide to jump in and sell.”
For many, one of the biggest obstacles to buying a home these recent months is simply finding one for sale. July inventory, or housing supply, dropped 30.1% from July 2019, a report record, and was the ninth consecutive month of double-digit declines year over year. This high-demand has also brought a headwind of affordability issues. While in line with pre-pandemic rises in price, July’s Median Sales Price of $285,000 is up 8.6% year-over-year.
Some highlights of the latest data found in the RE/MAX National Housing Report:
1. July Saw a Jump in Home Sales
July set a report record for most home sales in any month among the report’s 53 metro markets. Seven months into 2020, home sales are just 4.8% below 2019, compared to the end of May when the year-to-date total was 8.9% behind last year’s pace. Surprisingly, 2020 monthly sales have exceeded 2019 in four out of seven months thus far.
Leading the year-over-year sales percentage increase were Pittsburgh, PA at +25.9%, Des Moines, IA at +25.2%, and Denver, CO at +22.3%.
2. Sales Prices Are Up
Sales prices are up everywhere except Honolulu, HI, which saw a year-over-year decline by 4.0% in Median Sales Price. In July 2020, the median of all 53 metro Median Sales Prices was $285,000, up 3.4% from June 2020, and up 8.6% from July 2019. Twenty-two metro areas increased year-over-year by double-digit percentages, led by Birmingham, AL at +17.1%, Augusta, ME at +14.1%, and Indianapolis, IN at +14.0%.
3. The Scale is Tipped in the Seller’s Favor
A six months supply indicates a market balanced equally between buyers and sellers. In July 2020, of the 53 metro areas surveyed, zero metro areas reported a months supply at or over six, which is typically considered a buyer’s market.
The number of homes for sale in July 2020 was down 6.2% from June 2020 and down 30.1% from July 2019. Based on the rate of home sales in July 2020, the Months Supply of Inventory decreased to 1.7 compared to 2.1 in June 2020 and decreased compared to 3.2 in July 2019. The markets with the lowest Months Supply of Inventory were a two-way tie between Albuquerque, NM and Boise, ID at 0.7, and a four-way tie among Hartford, CT, Phoenix, AZ, Manchester, NH, and Washington, D.C. at 0.9.
Whatever your local situation at the present time, a RE/MAX agent can provide help, information, guidance and expertise on all things related to real estate.
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Written by Samantha Rotbart
