2020 is a year none of us will forget, for many, many reasons. “Uncertainty” has been a common thread to all of us throughout the year. But one place that word didn’t ever apply itself is, surprisingly, to residential home sales.
Industry experts initially expected the housing market to suffer, due to both the once-in-a-hundred-years pandemic and historic inventory shortages. But rather than a slowdown, we continue to see a residential real estate surge across the country.
Here in Long Beach, the average sale price of a home was $673K last month, a 14.0% increase over December 2019. The average sale price per square foot was $509, up 12.3% since the previous year.
And now experts estimate that these conditions are likely to last well into 2021.
Fannie Mae Senior VP and Chief Economist Doug Duncan predicts that existing home sales will ultimately “be up a percent or more in 2021.” While he believes home prices will continue to rise due to limited inventory, he's also confident the Federal Reserve will keep interest rates low into the future.
Market conditions like fewer available listings, evolving tastes in new home criteria, and record-low mortgage rates are changing the way people buy and sell homes in a lasting way. But this sustained activity, even in a time of uncertainty, demonstrates that consumers still view real estate as a sound investment.
The question that remains is how you should best utilize the housing market’s “new normal.”
Fewer Listings = Seller's Market
The number of homes for sale are at record lows across the country. The National Association of Realtors reports fewer homes on the market today than seen in data going all the way back to 1982.
Despite these low inventory conditions, the number of homes sold in Long Beach is actually 27.7% higher last month over December 2019. And at least for now, the fact that there are fewer listings creates an advantageous housing market for sellers.
For one reason, buyers have to act fast to snap up available homes. As a result, most properties that come on the market stay for an average of just 21 days before they are sold. “That is the fastest ever recorded in our monthly series,” says NAR Chief Economist Lawrence Yun.
Another benefit is that sellers are enjoying higher net returns on their listings. More than half of the homes sold in Long Beach last month received above their asking price, and less than 8% experienced any price decreases.
This seller’s market is not solely a product of the pandemic: The country’s top 100 metro markets, inventory has been dwindling since the first quarter of 2020.
What this means for homeowners:
Higher selling prices show that buyers are spending more on a home right now than they did last year. If there ever were a time to list for top dollar—and anticipate a full asking price offer quickly—that time is now. I can give you a free, no obligation assessment of your home's value anytime - just reach out & ask!
What this means for home buyers:
Due to low inventory, buyers need to be the most prepared, and have strong guidance & representation in the purchase process. You’ll need to have your financing in order and be preapproved for a loan before you begin your home search. I can help by connecting you with trusted mortgage professionals to get you started.
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