High Demand and Low Inventory: Factors that Defined the February Housing Market

The second month of the year continued the streak of increased home sales despite very low inventory, according to the February 2020 RE/MAX National Housing Report. February represented the last full month before the coronavirus became a global pandemic striking the U.S. on a large scale.

In an environment that’s new for everyone and changing every day as a result of the pandemic, Adam Contos, CEO of RE/MAX Holdings, Inc. noted that, “Professional agents – the local experts – can offer tremendous value right now. Even as we all adjust to the new landscape of social distancing and limited in-person interaction, houses will continue to be bought and sold. Overall, demand in February was high, inventory remains low, and interest rates are attractive, but exact circumstances vary by community.”

Here are some highlights of the latest data found in the RE/MAX National Housing Report:

1.     February home sales were up year-over-year – continuing a three-month streak of year-over-year increases

Home sales in February – which enjoyed an extra weekend day for Leap Year – increased 7.5% year-over-year, following strong increases of 13.5% and 10.5% in December and January. Leading the year-over-year sales percentage increase were Los Angeles, CA at +32.2%, Las Vegas, NV at +28.0%, and Billings, MT at +20.1%.

2.     Sales prices in February continued to rise

February’s Median Sales Price of $260,000 posted a year-over-year increase of 7.9% – the 14th consecutive month where home prices have shot up. In February 2020, the median of all 53 metro Median Sales Prices was $260,000, up 2.0% from January 2020, and up 7.9% from February 2019. Fifteen metro areas increased year-over-year by double-digit percentages, with the largest increases seen in Birmingham, AL at +16.5%, Augusta, ME at +14.5%, and Milwaukee, WI at +13.9%. Three metro areas saw a year-over-year decrease in Median Sales Price, with the largest decrease seen in Billings, MT at -5.2%.

3.     Inventory in February remained low

The number of homes for sale in February 2020 was down 2.6% from January 2020 and down 15.8% from February 2019. A six months supply indicates a market balanced equally between buyers and sellers. In February 2020, of the 53 metro areas surveyed, four metro areas 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 Denver, CO and Seattle, WA, both at 1.1, and a four-way tie at 1.2 among Boise, ID, Charlotte, NC, Phoenix, AZ and San Francisco, CA.

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.