There’s an important takeaway from the housing market in 2020 and it’s that buyer demand recovered much more quickly than the available supply of homes. In fact, according to the RE/MAX National Housing Report for November, November home sales were up almost 20% over November 2019 while, at the same time, inventory reached its lowest point since the report debuted in 2008. That extraordinary half-year run of high activity puts the housing market as a bright spot in economic recovery. Driven by pent-up demand and historically low interest rates, buyers are jumping into the market and competing for the limited number of homes that are for sale.
The short turnaround times and rising Median Sales Prices reflect this extreme imbalance between buyers and sellers. New November records, which reflect averages across 52 U.S. markets, included a Median Sales Price of $292,000 – up 13.8% year-over-year – and an average number of Days on Market at a mere 36 – down nearly two weeks from last year’s 49, according to the report.
“The nearly 20% year-over-year gain in sales is another sign of the housing market’s enduring strength and appeal. People are on the move, and we anticipate buyer demand staying high into next year,” RE/MAX Holdings CEO Adam Contos says. “The low interest rate environment is driving opportunities for both buyers and sellers, so the upticks in price aren’t slowing things down much at all. The primary headwind continues to be the severe lack of available inventory across the country.
“Eventually, generational factors, lifestyle choices and workplace flexibility should bring more sellers into the market, addressing the current imbalance. If that happens next year, 2021 could be one for the record books.”
November was the fourth consecutive month of 2020 to set a new report record for fewest listings. But buyers could have more to choose from next year. A recent press release from the National Association of REALTORS® noted several factors – including economic production, home construction and more – that suggest 2021 is likely to see a strong, active, slightly more balanced housing market.
Some highlights of the latest data found in the RE/MAX National Housing Report include:
1. November Home Sales Surged
Although November did experience the normal seasonal decline from October, with home sales decreasing 14.5% month-to-month (in line with the 12% average drop of the past five years), home sales were up 19.7% compared to November 2019. Leading the year-over-year sales percentage increases were Little Rock, AR at +36.5%, Chicago, IL at +32.3%, and Hartford, CT at +30.6%.
2. Affordability Remains a Concern
Not a single metro area saw a year-over-year decrease in Median Sales Price. In November 2020, the median of all 52 metro Median Sales Prices was $292,000, up 13.8% from November 2019 and down 1.0% from October 2020. Thirty-nine metro areas had a Median Sales Price increase year-over-year by double-digit percentages, led by Augusta, ME at +26.4%, Tulsa, OK at +20.7%, and Boise, ID at +19.2%.
3. Inventory Continues to Shrink
The number of homes for sale in November 2020 was down 31.8% from November 2019 and down 13.3% from October 2020. Based on the rate of home sales in November 2020, the Months Supply of Inventory was flat at 1.8 compared to October 2020, and decreased compared to 3.7 in November 2019. In November 2020, of the 52 metro areas surveyed, only two metro areas reported a months supply at or over six, which is typically considered a buyer’s market. Those markets were Miami, FL at 6.7 and Indianapolis, IN at 6.2. The markets with the lowest Months Supply of Inventory were Boise, ID at 0.6, and a three-way tie among Albuquerque, NM, Denver, CO, and Manchester, NH at 0.8.
While a shift to a more balanced market is still off in the distance, RE/MAX agents are prepared to navigate any environment on behalf of their clients. Contact your RE/MAX agent today if you’re ready to make a move.
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Written by Samantha Rotbart
