One of the biggest surprises of 2020 is the resilience of the residential real estate market. Lawrence Yun, Chief Economist of the National Association of Realtors (NAR), is now forecasting that more homes will sell this year than last year. He’s also predicting home sales to increase by 8-12% next year. There’s strong evidence that he will be right.
A 60.7% year-over-year increase in nationwide showing activity
ShowingTime, a leading showing software and market stat service provider for the residential real estate industry, just reported:
“Home buyer traffic jumped again in July [latest month available], recording a 60.7 percent year-over-year increase in nationwide showing activity.” That means there are 60% more buyers setting appointments to see homes than there were at this same time last year. The number of potential purchasers was also up dramatically in every region of the country:
The Northeast was up 76.6%
The West was up 56.7%
The Midwest was up 52.1%
The South was up 46.7%
The Housing Market Is Showing a ‘V’ Type Recovery
Housing Market Recovery Key Areas Defining the Market this Year
Record-Breaking LOW Mortgage Rates
Historically low mortgage rates are another 2020 game-changer. Today’s low rate is one of the big motivating factors bringing buyers back into the market. The average rate reached an all-time low on multiple occasions this year, and it continues to hover in record-low territory.
When rates are this low, buyers have a huge opportunity to get more for their money when purchasing a home, something many are eager to find while continuing to spend more time than expected at home this year, and likely beyond.
Continued Home Price Appreciation
One of the key drivers of home price appreciation this year is historically low inventory. Inventory was low going into the pandemic, and it is still sitting well below the level needed for a normal market. Although sellers are slowly making their way back into the game, buyers are scooping up homes faster than they’re coming up for sale.
This is a classic supply and demand scenario, forcing home prices to rise. Selling something when there is a higher demand for what is available naturally bumps up the price. If you’re ready to sell your house today, this may be the optimal time to make your move.
Even as home prices continue to rise, affordability is working in favor of today’s homebuyers. According to many experts, rates this low are off-setting rising home prices, which increases buyer purchasing power – an opportunity not to be missed, especially if your family’s needs have changed.
According to Mortgage News Daily: “Those shopping for a home can afford 10 percent more home than they could have one year ago while keeping their monthly payment unchanged. This translates into nearly $32,000 more buying power.”
If you want to know what's happening in your own neighborhood of choice, from Miami to Palm Beach, contact me for a free local market analysis or to answer any questions.