We can all probably agree that 2020 was a year full of changes, and the market was no exception. With inventory decreasing as buyer demand started to increase, some challenges came into play. We’ll be sharing some national trends with you today, but please keep in mind that depending on where you live, the state of the market may vary. Hopefully this information will help you to have a better understanding on how the market is doing as we close out 2020 and head into the New Year.
Americans were on the move in 2020
Nearly 15.9 million Americans moved in 2020. You may be interested to find that 22% of those moves occurred due to the COVID-19 pandemic. There was also a 27% increase in temporary moves, with a 2% increase in permanent moves. Another trend that may be attributed to COVID-19 was the preference buyers seemed to have for smaller towns, the suburbs, and generally less-crowded areas. This trend can be expected to continue into 2021. With home prices still on the rise, buyers may find suburban areas to be more affordable.
Existing Home Sales
Throughout 2020, we saw a drop in the number of homes for sale. In late 2020, we are at 2.7 months of inventory, which is a record low. The median length of time recently sold homes were on the market was 3 weeks, with median home price being $272,500. With limited inventory available, home prices surged upward, causing pressure for buyers, but earning top dollar for home sellers.
New Residential Construction
With interest rates at an all time low and a shortage of existing homes for sale, builder confidence is high as housing starts increase. Here’s a look at some numbers:
Housing Starts in Late 2020 ➡️ 1,530,000
Single Family Housing Starts ➡️ 1,179,000
Some obstacles home-builders have experienced in the face of such high demand include the lack of availability of lots, supplies, and increased costs of materials, as well as simply not being able to build at a speed to accommodate the amount of buyers entering the market.
Even though the year has been challenging, the future is still looking bright for the housing market. Right now, there is no better time to enjoy the comforts of a warm, inviting home in a location where you can feel content and at ease. Our team is always here to help, answer questions, and work to meet your needs. Have a Happy New Year friends!