Record-Shattering Home Sales Continue Into Fall
Delayed by pandemic-related lockdowns, summer's peak homebuying season pushed into fall. In fact, according to the RE/MAX National Housing Report for September, closings rose 21.1% from a year ago and on average, homes sold in a mere 39 days. Meanwhile, the inventory of homes for sale plummeted to an all-time low in September 2020.
Sinking below the previous report low set in August 2020, September inventory was down 31.9% from September 2019. Thus far, six months of 2020 rank among the 10 months with the lowest inventory in the history of the report.
Buyers are moving forward in record numbers as evidenced by the streak of record-shattering home sales that stretched to three months in September.
"September's massive year-over-year increase in home sales was the latest reminder of the housing market's overall strength and resiliency," said Adam Contos, CEO of RE/MAX Holdings, Inc. "Demand is off the charts right now. Buyers of all ages are coming into the market determined to improve their quality of life through amenities, community and the unique security that comes with homeownership. They're working through the challenges of tight inventory, high prices and competing offers to take advantage of historically low interest rates and, in many cases, the greater mobility they now enjoy through working remote.
"Generational factors and a continuing rebound in home construction support the notion of an active housing market moving into next year."
According to the recently released monthly report on residential construction by the U.S. Census Bureau, housing starts for single-family properties stood at 1.4 million, seasonally adjusted. That’s a jump of about 11% year-over-year and, according to National Association of REALTORS® Chief Economist Dr. Lawrence Yun, a “sign of the economy moving in a better direction.”
Some highlights of the latest data found in the RE/MAX National Housing Report include:
1. Home Sales Avoid Typical Seasonal Drop-Off
September sales were only 3.3% lower than August's, a far cry from the 15.3% average drop from August to September, based on the past five years. September year-over-year gains were most pronounced in Billings, MT at +37.1%, San Francisco, CA at +34.7%, and Hartford, CT at +33.3%.
2. Home Prices Soared in September
No metro area saw a year-over-year decrease in Median Sales Price in September, according to the report. The median of all 53 metro Median Sales Prices was $289,900, flat from August 2020, and up 12.8% from September 2019. Forty metro areas increased year-over-year by double-digit percentages, led by Augusta, ME at +25.1%, Tulsa, OK at +21.7%, and Indianapolis, IN at +21.0%.
3. The Demand for Houses is Easily Eclipsing the Available Inventory
The number of homes for sale in September 2020 was down 6.5% from August 2020 and down 31.9% from September 2019. Based on the rate of home sales in September 2020, the Months Supply of Inventory remained flat at 1.8 compared to August 2020 and decreased compared to 3.8 in September 2019. A six months supply indicates a market balanced equally between buyers and sellers.
The markets with the lowest Months Supply of Inventory were Boise, ID at 0.5 and Albuquerque, NM at 0.7, while both Manchester, NH and Omaha, NE had 0.8.